book arrived in the mail yesterday ;)

recommend pp43-48 on avoiding wall street fixation/thinking for yourself...happens here every day in real time...

IMF agrees to sell some gold

http://tinyurl.com/6en9sg

Right after reading Bill's comments on housing, I came across the following:

The man who brought us the housing bubble now has an opinion on when the housing problem will subside.

Greenspan Says U.S. Home Prices May Stabilize in 2008 (Update2)

http://tinyurl.com/6rmewr

Think I'll stick with Bill's opinion.

Greenspan just needs to stop speaking to this issue. He has been consistently, comprehensively and disastrously wrong at every key stage of this crisis.

Re: Dishoarding

A lot of talk has been directed in favour of shortness of supply for silver in North America and how corrupt the silver futures market is. Regardless of the comments, short-term silver lease rates are still in the negative. The same goes for gold.

Moreover, gold & silver prices are routinely trashed on the London markets, while North America and Asia tend to be buyers for the moment.

So I am assuming that supply is coming from Europe in bullion and sterling. Somebody is trying to raise a lot of money in a hurry and has access to both gold and silver supply. It can't be a central bank, and no ETF sales are reported. So I am assuming that stockpiled mine supply is coming out of the woodwork, which is not finding its way into refineries in North America, where there's a chronic shortage of coins.

FranSix, I got stopped out of my SLW after a nice gain. The chart looks like it wants to go lower over the short term. I see the same holds for other miners.

Sigh ... set my stop on SDS too tight yesterday and got stopped out. Yet another Charlie Brown trade for this N2S.

Having a hard time accepting research based on GS predictions, part of the gang that got us into this trouble. Are they afflicted with truth-telling, only in one area? I don't trust the banks, so why should I trust this?

Today, Everbank's Chuck Butler responded to rumors and inquiries regarding the companies "pooled" precious metals accounts.

"At EverBank, we hold our "pooled" accounts at the Perth Mint in Australia... I reviewed the legal stuff and here's what I found... The Perth Mint runs by a strict set of guidelines and policies: they do NOT sell metals short. They do NOT use derivatives. They do NOT lend clients' metals to other entities that may have short positions."

"For every ounce of metal they sell to clients, they MUST purchase a corresponding ounce in the marketplace."

Sounded like Kaimu was working for Everbank! LOL! Actually, good to see Everbank doing business with a relaible mint business.

I wonder if the Bill and the community would comment on highly leveraged trading ideas for shorting bonds. I have been playing around with TLT puts to try to learn how they act. However they do not seem to trade in a well matched way to the daily prices of long term bonds. If nothing else comes up, I think they will do, but they are not perfect. Perhaps if rates move decisively higher, they're not being matched perfectly won't make that much difference.

RRPIX seems to work, but it is not highly
leveraged.

Thanks for your comments

It is reasonable to expect that the mega fund flow into commodities will only strengthen as inflation goes off the charts and other market sectors continue their downward trek...

April 7 (Bloomberg) -- Global investments in commodities rose by more than a fifth in the first quarter to $400 billion, helping boost prices as investors sought a buffer against inflation and a weaker dollar, Citigroup Inc. analysts said.

Investments in commodity indexes rose $40 billion in the first three months of the year to $185 billion, a larger gain than the whole of 2007, Citigroup analysts Alan Heap and Alex Tonks said today in a note to clients.

A ``tidal wave of investment flows into commodity markets has further boosted prices,'' the analysts said. ``The weakening U.S. dollar has been the main macro force attracting funds to commodity markets. Other contributors are falling real interest rates and inflation worries.''

http://tinyurl.com/4z4sax

Saw the Chinese reminibi at 7.0. It's appreciation is increasing quicker than last year. IMO, appears Chinese policy is to allow currency appreciation to slow inflation, especially oil, food imports. It's also a way to send inflation from their shores (where it is high) to the U.S.

WMT would presumably pay more for imports and if unable to effect cost savings elsewhere, the consumer will pay more.

Wouldn't be surprised to see the reminibi below 7 today or by end of week.

And Citibank issues unbiased analysis of course....Tell me why again I want to listen to what Goldman and Citibank say?

I agree that unemployment poses the most serious risk to the stability of our economy right now, but I disagree to the degree in which it will hit the economy. I can't see us hitting 8.75% unemployment -- it's become easier than ever to start a business, more and more people are becoming self employed, there's still a lot of private equity capital waiting to be spent, etc. etc. We're definitely going to feel a nice sting from our current credit/inflation/employment predicament, but I just can't see it being as dramatic as you make it sound.

Looking towards historical stats makes a lot of sense, but we have to take certain advances in technology and finance into account as well.

-Wayne

[Bill Cara note: Wayne, thank you for a well thought-out position. As you know, what I try to do here is generate discussion. Hopefully I learn from the respondents as much as from listening to myself. :-)

btw, I love your site. I encourage everybody to check it out at http://tickerhound.com]

Re: Silver trade

I think there's still a ways to go in the silver advance against gold. None of the fundamentals have changed, and all the technicals favour an advance of silver against gold.

For the moment, the run-up of prices were out-of-seasonality and the corresponsing correction very severe. Perhaps this is what the market is telling us with the lack of advance in many share prices the junior PM market, where I remain invested without movement.

Only the most speculative stocks have seen speculative advances and those with prior speculative run-ups have seen monstrous declines. Others with value are seeing little benefit so much so that mergers and acquisitions are the order of the day.

Those large cap equities indexed to either bullion or sterling did well in the recent move.

Its a curious feature of the junior gold market

Sorry, its a curious feature of the junior PM market that they have not attracted more investment capital. But then again, intermediates not indexed to the gold price have a similar problem on their hands.

This is why I relate to the inverted gold/silver ratio, which seems to describe the action pretty well, though it does not take volatility into account.

Over the weekend, I was looking at the Fed's new credit facility programs and took some notes (http://tinyurl.com/4ulu29). The alarming trend is how the Fed progressively relaxes its collateral requirements as we move from the TAF to the latest PDCF. The latter allows dealer banks using all investment-grade (i.e., as low as BBB/Baa-rated) asset-backed private securities as collateral, as long as they can be "priced."

What is next? Credit derivatives as collateral? The banks surely have plenty of them. The Bear Stearns buyout case already has this component implicitly.

Jim Rogers went off o Fed Policy at Seeking Alpha today.

http://tinyurl.com/3kft3q

Remembering something about Greenspan today that makes me wonder if he hasn't, in the long run, set up a positive-a fox in the henhouse of the "corrupt" financial cabal. Perhaps it's just an overactive imagination, but...Greenspan was a devotee in the Salon of Ayn Rand and her philosophy of objectivism-of which I am not an expert. However, she loathed the socialist model and believed strongly in the merit of the individual. Given the bovine nature of the larger society and their (and our) limited ability to accurately engage and process information, there is no way such a system can truly be assaulted from the outside. We the sheeple don't have the capacity. Hell our vaunted representatives had no idea what they were hearing last week outside of Frank and Barney. The players are too powerful and too interconnected in the system. It would have to collapse from the inside. I'm probably giving Greenspan too much credit in an Aasimov's Foundation kind of way, but it is unlikely, except through mistakes of hubris by those incharge, that the system will see radical change.

I've been waiting "forever" for some substantive news from Valgold (VAL) regarding drilling results from Venezuela and Guyana. Today I was pleasantly surprised with what I think is very good news from Ontario operations.
http://tinyurl.com/5ctz5r
Vancouver, BC - April 8, 2008 - ValGold Resources Ltd. ("ValGold" or the "Company") is pleased to announce that it has received a positive initial NI 43-101 compliant resource estimate for its 100% owned Garrison Gold Property (the "Property") in north eastern Ontario. The main sulphide gold zones as defined by surface and underground diamond drilling to date host an Indicated Resource of 186,725 tonnes grading 8.06 grams per tonne gold ("g/T Au) and an Inferred Resource of 1,233,117 tonnes grading 4.97 g/T Au; The Author recommends proceeding with advanced underground exploration on the JP gold zone to expand the current resource base; and, The Garrcon Gold Zone is recognized as an excellent exploration target with a volume of mineralized rock that has the potential for a deposit of the 20 to 30 million tonne range and an in-situ grade potential in the range 1 to 3 grams for a contained gold potential in the range of 1 to 2 million ounces. Note, that the Garrcon Gold Zone estimates of geological grade and tonnage potential are conceptual in nature, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Disclosure: long VAL.

Wayne: I'm curious, what advances in finance and technology will overcome the loss of spending by consumers and the loss of home equity/capital?

Who will be utilizing any such advances? Doesn't utilization of possible advances require customers? Who will those customers be?

And, please inform us as to the advances in finance. I'm curious. What advances have left banks and brokers more capable of lending for personal and business use at competitive rates?
Where is the capital to make such loans?

Has finance evolved beyond debits, credits and accountability? What has changed?

Alan,
I'm not sure why you're seeking leverage, but futures are a great way to trade bonds, and by definition they are leveraged.

To find out what is happening in Asia & Australia I regularly watch Asia Squawk Box. It appears that the inflated prices for rice and wheat are having a serious social impact in China and India. Nearly a billion people in each of those countries are faced not with the prospect of having to switch to a cheaper food, but rather with the prospect of skipping meals. The potential for food riots is serious enough that price controls for rice and wheat are being contemplated. The Australian economy is also slowing.

thx for the update on Val gold,
ive been long Val gold for a long time
watching it slowly grind down to about $0.18 today w/ minimal volume on what is encouraging news makes this stock all the more frustrating.

i think its a waiting game for val gold, and it will move quick once it does, but until then this downward drift doesnt seem to have stopped.

While I might question Wayne's view on finance and tech, he does have some interesting ideas on his blog about advances in news and information technology that might help a lot here.
Bill, you may want to check it out as part of your suite of investor services.

I can see some of these as improvements over skype as it can reach everyone at or away from their computer.

Bill could stay in touch or post from his Blackberry or cell phone or....?

"Twitter.com – Twitter is a “micro-blogging” service that has just EXPLODED in terms of popularity over the last year. Instead of typing long articles or blog posts, people can now literally send a text message from their mobile phones to their twitter page which other people can then come and read. Imagine getting stock trade alerts sent to your mobile phone by your broker while neither of you were in an office.

So anybody following my Twitter (http://twitter.com/waynemulligan) can see what I’m doing, thinking, or talking about at any given time of the day.

This is the future of citizen journalism, and I’ll bet you’ll either be a reader or writer on this site within the next 12 months."

Alan,

Re: "I wonder if the Bill and the community would comment on highly leveraged trading ideas for shorting bonds."

I have been looking for exactly such an instrument and my conclusion is the same as yours. Can't comment on the movement of such puts vs. underlying, but I normally puchase LEAPs. They are costlier, but afford more time for my thesis to play out and have less of a premium per unit of time.

The other downside is the wide spreads. e.g. YLIMV (Jan 2010 $100 PUT) bid = 13.60, ask = 14.60.

Although I am exploring ways to procure and safekeep PMs, I would also like to know of PM instruments with leverage. GLD, SLV, DBP, etc. have no options.

There has been a precipitous drop in the confidence of small business owners - in fact, that index came in today at all-time lows (to the start of the series 26 years ago.)

Believe me, if small business cannot hire, then the US Economy is hosed.

Oh, and don't expect big business to help. A friend of mine who has a job with IBM - and has been for a long time - was pink slipped today. The reason? No funding for their position, nor any funding for an equivalent anywhere else in the firm.

Hmmmm...

A tale of two books:

Yesterday I received Bill's book, and have begun reading it. IMHO it contains something for everyone -- the basics, as well as more in-depth information on the capital markets, and of course tactical trading techniques. What I find most useful is Bill's "no holds barred" observations of capital market events and systems. He truly "calls them as he sees them" which I find commendable.

Another other book I have been reading is a biography of Hjalmar Horace Greeley Schacht. The book is entitled "Hitler's Banker", written by John Weitz. I was primarily interested in how Germany dealt with war reparations debt following WWI, and the role Schacht played by the central bank.

A quote from the flyleaf summarizes Schacht well: "Arrogant, witty, caustic and urbane, Schacht disdained economists and mathematicians; his true strengths lay in public relations, journalism, and psychology. As one of the dominant financial figures in the world, he understood that the German mark had no intrinsic worth; its value was what he could make the public -- and the world -- believe it to be."

I have learned (no real surprise) that a central banker, when working in conjunction with the government, has an unlimited "bag of tricks" to apply to a nation's economic woes, both internally and externally. I can see how some of Schacht's tactics have already been used by the Fed, and how many more are available for the future, some I never thought of or saw discussed elsewhere.

For example, (just relating from memory here) at one point Schacht consolidated all German debt (public and private) owed to foreigners under an entity controlled by the central bank. Then he offered the foreign creditors repayment terms of half in German currency, at a reduced interest rate, and the other half in various forms of scrip. The scrip could only be used for instance, on tourism expense within Germany, investment in German industry, or other "captive" forms of expenditure.

Bill's book is much more readable, and applicable in a tactical sense IMHO. But I continue to learn about the future from the past buy reading books written by people like Weitz or Murray Rothbard.

Best wishes to all on this blog, especially those who take the time to post comments, links, etc. for the benefit of others. I am learning from all of you.

lessmore We're already there. A number of countries have already instituted food price controls.

"In China, where inflation is at an 11-year high, authorities introduced controls on a range of goods from instant noodles to milk, calling it a temporary intervention to battle surging inflation. It was the first time in over a decade that Beijing waded into the food market.

In Thailand, the government is taking similar steps on instant noodles and cooking oil and in Russia, authorities are trying to cap prices of bread, eggs and milk.

In Mexico, the government is trying to control the price of tortillas after protests there, and Venezuela is capping prices on staples including milk and sugar.

Others include Russia, Venezuela, Mongolia, Kazakhstan, Cameroon, Yemen, Jamaica, Egypt, Tunisia, Maldives, Pakistan and Panama, according to the World Bank, which lists 21 countries that have controls on strategic staples."

http://tinyurl.com/45h8uw

As for food riots, I recall the corn tortilla riot in Mexico earlier this year, unruly protests in Italy on the price of pasta, etc. etc. Every day there seems to be an incident. Yesterday, my RTT news ticker reported one dead in food riots in Haiti.

BTW, think if you google food price controls, you will see examples of where this has exacerbated the problem in the past. Peru comes to mind.

TennesseeTrader,

Re: "I'm not sure why you're seeking leverage [for shorting the long bond]."

Can't speak for Alan, but I use ONLY options in my portfolio (LEAPs for core holdings, shorter expiration for short term trading and writing puts and calls). LEAPs help reduce risk and "define" maximum acceptable loss.

Seamus,
You left one out.

I believe Argentina is trying wheat price export restrictions to ease domestic food price inflation.

The farmers responded by food blockades into the city. As they should. They pay world prices for inputs, and should get world prices for their output.

It's an interesting political situation: the cities have the votes, so the pols pandered to them in putting price controls. Yet the famers have to supply food to those same city dwellers, and they are choosing not to. I bet the farmers can hold out longer than the city dwellers.

Here's another interesting thing I noticed: FUD started trading last week. It's based on a new commodity food inflation index. Interestingly, the new 'food price index' contains no rice component. Well, I found it interesting anyway. How do you construct a food inflation index and leave out the staple of what must be a majority of the planet?

Does anyone here read an economics/politics newsletter called The Privateer? I'd be very interested in your take.

Thanks and best to everyone.

MikeNYC "How do you construct a food inflation index and leave out the staple of what must be a majority of the planet?"

Must be a Westerner who has limited food consumption experience! Really hard to believe they'd leave rice out of the equation.

Was aware of the Argentina situation, but when responding tend to draw the line somewhere to avoid a long, long post. Wasn't aware of FUD. Thanks.

The rice shortage will really hit the Philippines hard. They seem to get hit hard by everything whether it's monsoons, earthquakes, Mt. Pinatubo or political corruption. Somehow they survive and move forward.

Seamus and Mike:
Thanks. Some of the indepth discussion on Asia Squawk was how China in particular was going to be able to balance continued urbanization (growth) and the demand of its people for food. China is now relying on imports of wheat and rice because it has diverted too much land and water to urbanization to be self sufficient. However, price inflation and food shortages in the food exporting counties poses a threat to this reliance. At this stage can China divert land, labor and water back to food production without a resultant steep worldwide inflation?
These are much more relevant issues than many of those discussed in the US financial media.

The latest development out of Asia indicates that China is preparing to take a major stake in the world's largest miner BHP Billiton. This action should throw some kindling wood below the entire mining sector...

"TENSIONS between Australia and China are set to rise as Kevin Rudd arrives in Beijing today amid revelations that China is preparing to buy a multi-billion-dollar stake in BHP Billiton.

Sources in Beijing said China was in the early stages of planning to snare a bigger chunk of BHP than the 9 per cent stake in rival Rio Tinto it bought with US-based Alcoa for $15 billion in a stock market raid in February."

http://tinyurl.com/4zarpc

With all the discussion of food inflation, I thought I'd share an anecdote. The other day I was at a local watering hole and got to talking with a guy at the bar. He was a truck driver based out of NJ. He bought my friend and eye a round of pints and insisted we not reciprocate (which I found a bit odd at first).

I got to talking about the economy and asked him his views from what he sees in the trucking biz. He was dead sure we were in a recession and that most people were unaware. Later on he tells us that he had recently spoken to his accountant who informed him he qualified for a one-time $5000 tax refund that was accessible b/c he was a truck driver.

So, the government is already subsidizing the dying truck driving industry - which can barely function based on current oil prices. So how sustainable this sort of subsidization. If oil goes to $150 and beyond, how will these truck drivers, many of which own their own rigs, etc, be able to turn a profit? Margins are already getting squeezed mightily.

But eventually this will all play out in higher prices for the consumer. If fewer people are willing to take up truck driving as a profession b/c they are unable to turn a profit, the costs to ship goods will (and already is) increase drastically.

I will be expecting to see more organization like this amongst the trucking industry as margins are squeezed further:

http://tinyurl.com/48jlzq

If our government is already providing $5000 tax refunds, what will they need to provide the trucking industry with when a barrel of oil is $150? $200? $300?

What happens if we have trouble transporting simple goods to stores. Retailers/Merchandisers will not be able to turn profits and the taxpayer will be stuck not only footing the bill for industry subsidies but paying higher prices for transported goods across the board. This scenario is certain to bring rapid price inflation.

Hi,

Food for thought:

Sometimes it happens even to the best of traders that they become very attached to their own opinion.

While studying hard and building an insight into the market is a very healthy thing, the best traders are the ones tho are able to form their opinion, and then keep it in the back of their heads and trade according to the underling conditions.

This is exceedingly difficult.

Even if the "opinion" is right, there is always the matter of timeframes. A great vision of the future path of the market may bring ruin if traded too soon.

In this light, I suspect that accomplished students of the market would benefit from:

- Establishing their own independent view.
- After that is done, being able to abandon it and dance the dance, waiting for confirmation of their opinion.
- Understanding that certain great market views carry the danger of too early implementation in a wrong timeframe.

Psychologists would say that this is about having a very healthy ego in the sense that the person understands that she or he does not have to be right. The ego doesn't matter, only P&L counts.

One way of escaping the ego trap would be to channel the ego energy to other areas of life, such as sports, or social welfare, or charity, or whatever.

Just food for thought.

Cheers,

Science: Developing the conviction that the world works in a certain way, and the willingness to surrender that view in the face of new evidence!

Thank you Bill and Maromatics for your response to my concerns about ETF's. Bill, I like Larry Berman on BNN so please do ask him about the counterparty risk for etf's. I don't always catch him though so if you could give me a heads up when he responds, I would be in your debt.

Maro, I actually do trade options through another account but my question about the ultras may have mislead you as you are not aware I am in Canada. Regardless, your considerable knowledge of this trading environment and your response was a further reinforcement for me that the ETF game is best day-traded or left alone entirely. Which I guess leads me to want to beat a dead horse so here goes... is there any counterparty risk involved with options? I know this seems very "Chicken Little" of me, but the markets are making me nervous and I cannot buy physical gold in an RRSP in Canada, only CEF.b and some great juniors and seniors, ie G, SLW, etc.

thanks again

Chris

You won't get much more of a surer sign of a slowing economy than this...

CRAIG, MONT. -- The nation's top hauler of container rail freight, BNSF Railway Co., is parking miles of rail cars in Montana and elsewhere because there isn't enough freight to keep them rolling.

Cars that often carry 40-foot containers of goods shipped from Asia stand like an iron fence between the Missouri River and this Montana burg known for world-class fly fishing. They stretch as far as Sandee Cardinal can see when she stands outside her home on the river's west bank between Helena and Great Falls.

"What is that but a symbol of how America is down in the dumps right now?" Cardinal asked as she gazed at the cars that haven't moved for about three months.

http://tinyurl.com/529uzx

Is the party over for solar?

FSLR could pull all the way back to 220 or so before the dominant uptrend is broken. A pullback to that level might provide a nice re-entry to solar.

Just thinking and watching, for now.

fireworks - Imagine - a struggling, young journalist wanders down a road in Craig, Mont, with an assignment - find a story! There! He luckily sees Sandee Cardinal standing (fishing?)on the banks of a river in the middle of nowhere, and she whispers for the world to hear: "What is that but a symbol ... ?

Just kidding.

In any case, the railroad companies know how to keep their earnings up.

http://tinyurl.com/6lcn5t

trader C: gold in RRSP

You may want to do more research if you are interested in holding gold in an RRSP. It is my understanding (I am a layman, not tax or investment advisor) that you can, under certain conditions. here is an excerpt from one of CCRA's publications:

"Qualified Investments – Investment-grade gold and silver
bullion coins and bars, and certificates on these
investments, are qualified investments for deferred income
plans such as RRSPs and RRIFs. The gold must have a
purity of at least 99.5%, and the silver a purity of at least
99.9%. The investment must be acquired either from the
producer of the investment or from a regulated financial
institution. These rules apply to investments made since
February 23, 2005."

http://tinyurl.com/67qe65

US mortgage crisis may cost 945 bln dlrs worldwide: IMF

http://tinyurl.com/47xp8k

U.TO - Uranium Participation fund is looking attractive as it tests the 52-week low. I'll be looking to scale in a small starter position this week.

Chris,

Options trading is not exempt from counterpart risk, of course, like all other derivatives.

However, there is an enormous difference - the VaR.

In a black swan event you may lose all the cash you have in options if it happens that your counterpart folds, but since you will only be trading a small part of your portfolio, that should not be a big problem.

BillySundance: Thanks for the heads up on U.TO. I almost bought some late yesterday at $9.20, then forgot about it. Added some at $9.00 today.

I view this as a longer term play, and I am prepared to scale in at lower prices.

*MINUTES OF MARCH 18 FOMC MEETING: JUDGED A CONTRACTION IN GDP IS 'LIKELY', INFLATION DATA 'DISAPPOINTING'

- Most officials see inflation moderating in late 2008 and early 2009, though 'proloinged and severe economic downturn' possible, yet greated uncertainty about inflation outlook
- FOMC says calibrating policy was 'difficult', and economy activity may shrink in 1H08

FXP/QID-> taking both off the table here...back in the green on both positions and tired of holding...may rotate into more SMN...

ESLR- out here for a minor gain...

positions whittled down to DUG/SMN/DZZ/HGD.to/DXKSX...short commodities and bonds...

OK, all of you who doesn't have the strongest heart better don't read this... and those who do make sure you sit down:

US TREASURY'S PAULSON SAYS LONG TERM US ECONOMIC FUNDAMENTALS ARE STRONG
- Says economy is going through ups and downs
- Notes that is very clear that the strong dollar is in the US interest
- Adds that economic fundamentals to reflect in dollar valuation

2nd - surprised to hear you're out of FXP. I think we may have an 80 handle by days end - but I've been wrong a lot lately. Like you say though, never hurts to take a profit.

craig- looks like your WM short and other positions are doing well today ;)

sundance-> i started to scale into FXP too early (82.50), added at 75 and 73 to bring the basis down to 77 and change, so out early at 78 and change is somewhat of an emotional decision-> just tired of watching it ;) i have more open positions right now than usual, and still waiting for the commodities to sell off-> FXP/QID were kind of a distraction...

pressing the trade on SMN at 33.87...

Looking at the volume today, I don't know what to think... Unless it picks up seriously in the last hour, it's quite a low volume day. Coming into NQ support around 1840 on such dry-up and bouncing off of it, it bodes well for UPward continuation... everything in me protests against the notion, lol. However, if market holds this support, goes back to 1900 (for NQ) with improving volume and breaks it, it's clear sailing to 2000...

food riots breaking out in UAE, Egypt and Haiti

http://jglobal.blogspot.com

Avalanche names Barron as adviser, grants option
(AVH.v Last @.105cts)

2008-04-08 10:57 ET - News Release

Mr. Sandy MacDougall reports

AVALANCHE MINERALS ANNOUNCES APPOINTMENT OF ADVISOR

Dr. Keith Barron, co-founder of Aurelian Resources Inc. and recipient of the PDAC International Discovery Award, has entered into a consulting agreement for advisory services with Avalanche Minerals Ltd. Dr. Barron has worked in mineral exploration for more than 25 years, for a wide variety of commodities and on all the continents except Antarctica. He has consulted for both junior and senior companies, as well as investment houses, with an expertise in epithermal gold deposits. He has previously worked for Gold Fields Mining, Battle Mountain Mining and Santa Fe Pacific Gold. Dr. Barron is co-founder of Aurelian Resources and founder of U3O8 Corp. He holds a PhD in geology from the University of Western Ontario and has written numerous scholarly works, as well as general mining interest articles for trade publications.

Dr. Barron's role will include lending his geological expertise as Avalanche advances its Ecuadorian and Colombian projects. Dr. Barron's experience dealing with industry and government officials will be welcomed by Avalanche. Avalanche has also granted Dr. Barron 400,000 incentive stock options as announced in it's news release in Stockwatch of April 3, 2008.

Avalanche's president, Sandy MacDougall, commented: "We are extremely fortunate to have a person of Keith's credentials join our team. His experience in South America will greatly benefit the company as we advance our projects in Ecuador and Colombia."

[Bill Cara note: CdnxTracker, we've covered this ground before. Do you have an opinion on this company, or whatever, or do you just want to reprint news releases? If it's the latter, I can tell you that nobody here is interested. We'd like to hear your opinions and if you are long or short the stock.]

White House says can't support US Senate housing bill.

http://tinyurl.com/5hoqxo

"Specifically, the White House rejects provisions that would give a tax break to buyers of foreclosed homes and provide other tax breaks, said White House spokeswoman Dana Perino."

This is sad. They govt/Paulson can meet over a weekend and bail out speculators on wall st, the ones who issued these mortgages and flipped them over and over to each other, yet they cant bail out the little guy.

As i have mentioned, this is not going to change for the avg American unless the people take back control thru action. it wont be done in a court room or congress or white house.

[Bill Cara note: Well done, NYUgrad. You took an important piece of a news release and you gave us your opinion. Thank you.

Of course, I know you are long the White House. (LOL)]

G-7 meetings of nations' highest finance officers might not have lasting impact on markets but I recall that the "jawbonings" that goes on in advance of meetings DO have an effect because different countries have different agenda for each meeting. For example, when the US was supposedly trying to get China to back off from currency linking, the $US seemed to drop as an indicator of Chinese inflation to come. Now, one might suppose that it would be important for the $US to seem strong at least for a week or two going into G-7 so that other countries won't want to drop the $US from usage.

If so, then we can expect some mysterious rumors, such as IMF selling Gold (they don't own any), acting to drive Gold prices down.

Here is some more on the topic of G-7 volatility and opinions.
http://tinyurl.com/48b4t8

[Bill Cara note re IMF gold holdings
http://www.imf.org/external/np/exr/facts/gold.htm

But can they sell it without US approval?]

"food riots breaking out in UAE, Egypt and Haiti"

Good article Dr. Cosa. If the printers or I should say bankers don't get their act together soon, the food riots will morph into major upheavals and even take down a few governments. It is too bad that millions of poor people are suffering just so a few hundred ultra-wealthy bankers can be bailed-out. Hopefully for the money printers, they do not lose control to the revengeful masses.

Fireworks

FREEDOM57 AND MAROMATICS

Thanks for the heads up on gold in an RRSP. Looking in my rearview mirror, I did not recall that physicals could be held, guess they changed it and didn't tell me or I wasn't paying attention in the first place.

Maro, the possibility of a major black swan event is scary indeed. You are right however that a 10% or less allocation to options is a decent tradeoff in such an event, just keep the outlay small.

I do appreciate your candor regarding my "Chicken Little" moment, a little clarity and calm in a sea of madness.

Hope Larry Berman can sort out the mess I have called attention to. If I am right and another investment bank blows up over a weekend, it would be well-advised to Bill's readers to proceed from here with extreme caution trading ETF's. I for one shall continue to trade them (FXP is a favorite but volatile as stink !)but will make a new habit of not holding over the weekends.

thanks

Chris

2nd: Wasn't short WM (regretably) but had a couple round trips on ESLR yesterday, reloaded this AM, sold at 11.39, reloaded again and got flat at the close which means it rockets over $12 tomorrow AM.....while I wait at the station. :>)
Sold my ultras for some decent profits. Like you I was tired of seeing red, added to them yesterday and sold today. Did a couple RT's on SRS. Not a bad day.

Re: Dishoarding

This article about pawn shops lends some credence to the dishoarding theory.

A new beginning

With gold trade-ins running high, but retail sales of gold jewelry low, there is a limit to how much gold pawn shop owners and operators are willing and able to keep in stock.

As a result, many pawn shops are sending gold to smelters for recycling.

“Stuff that is undesirable is melted and sent to market,” said Kufler.

Baron agrees.

“We can’t just keep accumulating gold because we run out of money. We are sending more to refiners or smelters,” he said.

What happens to gold after it is melted down?

“There are a lot of places buying gold right now and sending it off to refiners. Since there’s less gold being bought in the U.S., I believe the refiners are selling to places where gold is cheap, which would be Europe, China and India,” Baron explained. “Gold has not risen, it just takes more dollars to buy gold. In a lot of places in the world gold is getting cheaper.”

http://www.elpasoinc.com/showArticle.asp?articleId=2387

Pawn shop dealers trading gold for cash would be better off instead of selling to have refineries process their precious metals and have them stamped into coins, where they would sell for a premium. (admittedly refineries that mint coins are very rare.)

The price of gold being cheaper in other currencies is erroneous. All currencies have declined against gold:

http://www.research.gold.org/prices/daily/

Hi,

For all community members looking for more insight into options, there is a section of this website in which Bill has some time ago posted a wonderful 101 about options trading.

A true must read.

Cheers!

Bill - re IMF sales of Gold. You are right, and I stand corrected. IMF does own Gold. I saw a reference to the IMF not actually having any Gold *because it MIGHT have leased it all out* but my memory lapsed on that last part.

My apologies to anyone who was confused by my post.
spot

"Coming into NQ support around 1840...."

Sorry, what index is that referring to? And what is NQ?

Hi,

Re PoG: at this point I remain unconvinced that the correction is over. Actually, I expect PoG to drop further in the coming days / weeks.

The gold bull however is not in question.

I am patiently letting the price come to me.

DYODD...

Cheers,

Thanks Maro for your views. Patience is certainly a virtue, if not a necessity, in the markets.

ALOHA !!

ON THE BLS
I do not trust the US government's BLS. First we need to get the BLS to explain their "birth-death model"! Many people who work for a living and then quit are lost and uncounted, like small biz owners and independent contractors and consultants who do not qualify for unemployment, yet they may qualify for food stamps and welfare. Once your unemployment benefits runs out are you still counted? I believe the BLS is as flawed as the CPI.

ON FOOD SUPPLIES AND RIOTS
Supplies are on fumes and have been for sometime now. I have posted many articles here on everything from rising farmer suicides in India and algae to replace corn biofuel as well as mass riots in the rural areas of China by disgruntled farmers. I guess what it takes is food shortages and street riots to get the global government's attention. I am not opposed to that since it has been the futures markets making all the profits on the backs of farmers for a long time now. Let all the COMEX traders get out and dig irrigation lines and do harvesting. Maybe we need a futures market on HB&B CEO pay and remove pricing from their control! I think the solution is to get rid of the futures markets and let farmers make a profit by setting their own prices! The abundance would return.

Obviously the ultimate personal solution is to buy a farm and grow your own and not be so dependant on SafeWay and the COMEX! How many times has the food price been marked up by the time it gets to the shelf at your local Whole Foods?

This has been coming for a very long time. Think about this ... "It is no mistake that an M3 chart looks identical to a World Population chart!" Family sizes expand along with rising credit. Also medical technology has made people live longer, but medical technology has been financed with credit as well. Anybody see a common denominator here? It is an unforseen consequence of printing money the bankers did not "bank on" and neither did the US government and all their high paid statisticians.

ON FOOD AND HAWAII LAND
Combine population growth with food shortages and water shortages and prime Hawaii acreage becomes priceless! This is one of the few politically stable and climactically stable places on Earth where water and food exist in abundance, while pollution and population is exceedingly minimal. Capt. Cook long ago saw Hawaii's value and so did the Missionaries and Dole Pineapple! Isolated with unfathomable abundance year round ...

Property we bought on the Big Island two years ago is still worth over 200% more than what we paid for. There has been a fall in pricing, but not a significant one like in Florida and California. Even the condo market in Honolulu is stable, still $600k for the average condo! I would watch prices for Hawaiian acreage and buy the lows. I'm not sure when that would be since the US Peso's value makes Hawaiian land very cheap for those with a Euro in hand! Then I expect the Asians to make another bid for Hawaiian real estate like they did in the 1980s. You can buy five acres of Big Island land a lot cheaper than a studio condo in Tokyo costs!

As I have reported in the past US Farmland is the only US real estate that is increasing in value.

Did anyone notice that the book link is gone? Was that just a link to booksonbiz.com? Was looking to possibly pick up a copy.

[Bill Cara note: the book link still works, I think. Let me know if there is any problem ordering.]

"Sorry, what index is that referring to? And what is NQ?"

Denny,

NQ is NASDAQ-100 e-mini futures. My preferred to track NASDAQ; one can use $NDX, $COMPX or QQQQ if one prefers

the book link is still there, just checked...right above the search field on the RHS?

craig- OK, i was just making an inference from your WM comment yesterday morning...

still think commodities are overbought and need to correct sometime...at this point, even a minor correction will put me (us) in the green...

may have exited FXP/QID early, but with the day job, find it difficult to be juggling too many positions...glad to hear you had a good day...

Re: Kaimu/Hawaii Land

When I was in Costa Rica last August I was quoted a price of $15,000 per hectare (just over 3 acres) for plots of land on Costa Rica's peninsula del Oso near Bahia Drake. The land has to be some of the most fertile in the world as it is near Corcovado National Park - considered the most ecologically diverse place in the world.

Though logistics are difficult, there is a domestic carrier Sansa Air who flies daily flights on small Cessna's. Their is no airport -just a tent near the landing strip with a tent.

As someone who is early on in their career, I am unable to make a permanent move to somewhere like this. I am wondering if it could be possible or economical to buy land in area like this. I would think that Costa Rica has fairly little political risk compared to other Central American countries.

Has anyone ever looked into land ownership in Costa Rica? Is it possible to own land that you do not actually occupy on a regular basis? What kind of costs are involved in maintenance? Any and all advice in how you would go about evaluating something like this is greatly appreciated!

Picked one up! Glad to support the site!

Most recent bullish theories cite the transports as a sign of possible recovery, with a double bottom for the trannies and an inverse head and shoulders for Fed Ex.

However, UPS guided lower due to the economy. (Bloomberg). I wonder if this changes the outlook of those relying on that thesis. Truckers striking/protesting fuel costs, airlines dropping like flies....gas is over $3.50 a gallon here, my guess is the fundamentals don't support the technical patterns and we see further weakness in the transports.

You can buy what many consider to be the best farm land in the world here in Iowa for 5000 to 6500 an acre. It has never been higher. Costa Rica seems very expensive and a hectare is 2.2 acres I believe.

AG inflation, another view.

My wife feeds the birds. Mainly black oil sunflower seeds. We have been paying $18 for 40 lbs. if Wal-Mart is out ($20 for 50lbs @Wallyworld), which they were today. Went to the feed store and the price has risen to....$25.99. A 44.5% increase!

We've had riots in Mexico over corn tortillas and rice hording in Asia....hasn't anyone seen Alfred Hitchcock's warning about what happens if we piss off the birds? :>)

craig- filled up this morning at my usual place-> 3.87/gal regular, whereas the last time i paid attention to the price it was more like 3.37...

Bay Area signs of recession: INTC and AMD have/will cut 10% off their payrolls, state of California mailed out >10,000 pink slip notifications last month, corporations in SF cutting back travel expenses (some are requiring all travel be approved by the guy in the corner office), retailers based in SF (Sharper Image, Gap) in trouble or slashing prices-> i have to agree with you, where exactly is transport going to find earnings support for any uptrend?

meant to say that CA mailed out >10,000 pink slip notifications to public school teachers, due to a $4B budget cut...

if i were to make a bet on wednesday's open, it would be red...

10,000 teachers? Yeow! That's gonna smart.....
It's not like classrooms weren't overcrowded already. How many kids per teacher will that be?

And the downward spiral continues......

positive spin is getting old...just think traders are tiring of it, and we sell off for awhile...

craig- even though we moved to where we are now not least for the highly ranked public schools, and even after years of responding to requests for 'donations' to support programs/services that would otherwise be cut, it's been taken to a new level lately...

IOW, shoulda hung on to the FXP/QID...but selling was based on my read 7 hours ago (LOL), which is a long time given my current time horizon...

we have shortage of skill worker?
because we do not want to train and teach our
children. so layoff teachers

vinod- what kind of targets are you hearing these days...personally, my take is the next major move takes us back below DJIA 12000...

2nd
There is belief here that financial crisis is over for short turn
And money from fed at 2.5 will help financial a lot
Plus change in rule not to mark to market
All of this is pointing positive for short term that the reason I got rid off the entire short
This is their belief
My guts feeling is otherwise

They told me watch S&P 500 for 1360
if goes lower we are going lower
if it hold we going higher
they show me 10 days chart

vinod- glad to hear that...when traders are expecting the worst, it gets too crowded...when they think the worst is over, it sets the stage for the next leg down...

my hope, of course, is that energy/commodities (latest buying frenzy does not place them in the strongest of hands), will join/even lead the downside move...

I hope no one will make decision base on what I posed

i see NQ futures have gone from +900 to -300 within the past hour...

more evidence for EEMt's theory that global markets trade off this blog ;) keep it up, vinod-> we need to see red skies in the morning for a change...

I spoke with Sandy MacDougall (President of AVALANCHE MINERALS LTD. AVH.v) in great length tonight. I was not actually looking
to speak witht he President but it worked out much better in my favour that way.
I asked him several questions and can confirm that indeed Mr. Barron is on his
way to view the Colombian property for a 2nd time. He did just get back from viewing
the property a few weeks ago and is now going back to look at a few more things prior
to the deal closing.

Sandy MacDougall would not confirm with me who would be participating in the PP, although
he did say that a number of insiders would be taking part. I asked if it was only for insiders
and he said no but it is already spoken for. So we should be getting news about the PP closing
any day now. He thought the PP would close by the end of the week and if not for sure early next
week as most of the funds were already in hand. Mr. MacDougall already owns 5.9million shares
he said and he did not rule out buying more. He also disclosed that 2 other board members also
hold a very large number of shares and he estimated the total number to be approximately
12million of the 60million outstanding.

Someone had a concern about the (Virgen de la Nube code No. 227, Virgen de la Nube 1 code No.
102471 and Concepcion code No. 102601) located in the Azuay province, Republic of Ecuador
payments not yet being made. Mr. MacDougall said that the deal and payment has been closed and
they did not see a need to disclose that as it was already released in a prior news release on March
24th. So this is just me guessing now, but I guess the TSX Venture news release saying that the deal
was accepted also meant "the deal is done."

I asked about the potential or the need for financing and why the rollback. Mr. MacDougall replied because
it is in our best interest to keep a small float and tightly held. At the sametime it would attract larger
institutional investors into doing further PP's if needed as some will not participate in penny stock PP's.

So again my guess is these guys will run this stock up to about .35-.40cts and possibly do the rollback
after the .10ct PP. So 70million outstanding shares, then 18,750,000 after the 4:1 and we then have a
$1.40-1.60 share price and probably another PP @ $2.00+

AVH is now gearing up for a big promo and with a producing mine, creating free cash flow and a top
notch nominee addition to the advisory board like Dr. Keith Barron, co-founder of Aurelian Resources Inc.
(ARU.t) you can see that they are moving in the right direction. I have placed my bets on this guy and I
think with the likes of Dundee and Cannaccord coming on board, and probably Sprott here very soon we
will see a much higher share price. Call me crazy, but I am in for the ride! :)
CdnxTracker

skf is down after hours

Reading BillySundance’s recollection of his conversation with the truck driver and what’s going to happen when oil hits $XXX a barrel and the implications for distribution combined with current food riots in developing lands, and maybe we’re seeing the future for the US.

Not to sound all crunchy granola, New Age, but energy is life. Basically your body is just an engine that consumes biofuel. Now getting back to petrol…for the last 100 years or so we’ve been in an cheap energy bubble, and it looks like we’re headed for the reversion to the mean.

Starting with the industrial age, productivity increased in leaps and bounds. That is the amount of energy expelled to produce a unit of output was reduced drastically in both BTUs and time. However that productivity was limited to large installations that could house coal/wood based steam engines to drive the apparatus.

It wasn’t until the onset of the petrol age that the engines and fuel delivery systems could be miniaturized enough for road applications that the industrial age actually hit the streets. Now the scary part is, this miniaturization allowed all this cheap energy to infiltrate all parts of life and also affect how the USA is laid out.

To be more explicit, unlike Europe, the vast majority of growth in the U.S. and its logistical infrastructure was developed and laid out during this reverse energy bubble.

Cheap energy allowed suburbanization where the local farms that used to support the local population were dislocated according to the principle of economic “highest and best use.” With cheap energy it was nothing to have food shipped to Boston from California or South America, or…
Whereas, Kaimu compares world population growth with the M3 chart, I wonder if that is valid. If the growth of M3 by its nature implies inflation, does it then make it cheaper to raise children? I don’t think so.

I think productivity increases make things cheaper, and oil just might be the alchemic substance at its core this last century. Now everything will become much more expensive and productivity gains much harder to come by.

Referring back to the logistical structure of the US, these riots we see out there may be coming here in the not too distant future as the US schematic is tested during energy’s reversion to the mean.

2nd
wow!!!
you are right, futures are down suddenly

vinod- LOL...the market really is 'us,' in general an emotional lot (i know we all strive to be otherwise, but let's face it, we're not built that way)...have you ever broken up with a girlfriend and gotten depressed, then some friends try to convince you it's actually a good thing-> now you can hit the bars and meet new women, and maybe you actually have fun for awhile and start to believe they're right...until you start to miss the girlfriend and realize it's really a bad thing...the market is just like that-> washington is out to convince you it's all good-> after they leave and turn out the lights you realize not only was it was a snow job but also you willingly parted with most of the cash in your wallet...;)

now they're green again...they fade this blog (LOL)...

time to sign off...no change in my outlook...we'll see how it plays out in a few hours...

I have a question about the idea of shorting bonds, which some people on this blog want to do as a medium-term trade (or so it seems). If I believe in the possibility of bonds falling, does it mean that I should also sell my commodity positions (or at least not open new ones)? If bonds go down, then yields go up, which puts an upward pressure on the dollar. Or are there other forces at play that can override this effect?

Thanks,

DavidV

David,

There are definitely other forces, one of which may be speculative demand that drives prices up despite US$ strength. Can't remember where I read it now (might have even been here) but I read something about inflows into commodity indexes going up by 1/5th in the last quarter.

Sorry I don't have a link and it's real fuzzy, but given the role hedge funds and their ilk have played in the market by ramming money into hot sectors, it's not hard to imagine...

I'm positioned similar to 2nd, holding SMN waiting for a pullback (but also hold junior PM's), but I worry about them funds (but not enough to sell my SMN :)

Re: Land in Costa Rica.

Do your homework. There are a few major promoters who have been pumping up the prices of land there for a few years. There could be better deals elsewhere.

You also need to watch out for fraudulent land sales and squatters. Stay away from too good to be true deals.

http://www.quatloos.com/traps/costaric.htm

But it is a beautiful country with lots of expats... and there are still some deals to be had.

http://www.remax-tresamigos-cr.com

You may also want to look at Panama & Belize.

Anybody else besides me feel like gold might be quite ready to break lower? Just a funny feeling. Don't know why.

ALOHA !!

nemo ... You miss the point! It's the expansion of "credit" that fueled many direct and indirect aspects of World population expansion. I only mentioned one "indirect' fuel for population expansion, which was the funding through "credit" for technological advances in life enhancing drugs and medical procedures. There are many more ...

nemo posts: "If the growth of M3 by its nature implies inflation, does it then make it cheaper to raise children? I don’t think so."

YES ... It does if you finance everything which is what the "American Dream" is based on ... "credit" and debt. Imagine a World without credit where you had to "save up" first before you could buy a home or a car or your first kid? You are looking at "affordability" in only one dimension. Inflation also impacts wages or do you know someone who is still working for $1.75USD an hour?

Oil really took off after the EIA inventory release. The pace of the move makes me suspect of a blow-off top.

Regardless, I really don't see how a rise an oil can be a good omen for a continued rally in equities across the board.

I am looking for an intraday reversal in oil and oil related stocks. Could be a good move to go short USO with a tight stop (maybe just above $90) which would be a loss limit of about 1% on a day trade.

Bought USO Apr 87 Put $1.60