-- Posted Tuesday, 8 May 2007 | Digg This Article
Quietly Waiting
I’ve been waiting for gold to break through the $700 level and then to surpass the old highs of $721.50 set in May of 2006. Achieving that level has proven to be problematic but I’m also coming to the realization that penetrating the old highs may have the affect of opening the floodgates going foreword. Simply put, we’ve been in a consolidation phase that tests the patience of everyone involved. Now is no time to throw in the towel.
The last several months have been horrific for the US, both domestically and internationally. The news has not been good and is only getting worse; especially as pertains to the Iraq War. I’ve been keeping a low profile but have used the time to study the geopolitical situation and deal with some behind the scenes issues in the junior mining sector. If we filter out all of the “noise” pertaining to gold and the gold community, we discover that the bull market in precious metals is in tact and “full speed ahead”; albeit at a much slower pace than most gold bulls would prefer.
If you’ve been following Bill Buckler, Roger Wiegand, James Turk, Jim Sinclair, Richard Russell, and a host of other talented writers whom I have recommended, you are right on top of the precious metals markets along with their corresponding geopolitical sectors. You most likely have an excellent perspective on what is happening in the world. You are well informed and hopefully have a financial plan in place. I have to say that reading Buckler’s “The Privateer” (www.the-privateer) is as much fun as going to the dentist. However, you do it even though you may dread it, because you know it’s the right thing to do and a little effort now may well serve you in the future.
The truth has not been kind to the US over these past six to eight years and Buckler is certainly not afraid to point that out.
“The Stealth Bull Market Continues”
It would appear that it has been a stealth bull market in this precious metals sector and while some junior companies have done extremely well over the past year, many are simply treading water. This is the story line as I see it. Gold, Silver, and the commodities in general are doing well but very few people seem to be aware of the trend. I can only think that this is by design—not by the companies themselves, but by the groups who would prefer that gold keeps a low profile. Quality Junior Mining companies need to continually keep their presence front and center of the investing public. This not only helps the companies but it gives confidence to the shareholders that the story is being told and there is a light for them at the end of the tunnel. Frequently, that tunnel can seem long and dark, especially when one is in the middle of it after several years.
To that end I’ve requested that Goldseek.com repost one of my articles written about six months ago. It is not for everyone but it is a topic I believe that most junior mining investors and executives should understand. It is titled: A Marketing and Promotional Strategies Guidebook for Junior Mining and Other Public Companies.
We’ve noticed that the Dow has been hitting new high after new high. That would make it appear that all is simply superb in “financial land”. I would ask you if you feel that this is the case. My sensing is that it is not.
Nevertheless Richard Russell assures us that his PTI is hitting new highs and goes on to state: “I don't think investors appreciated the rarity and the power of the April 20 (07) breakout in which all three D-J Averages, Industrials, Transports and Utilities, rose to record highs on the same day. That power is carrying through to a market that seemingly does not want to look down. On April 25, incredibly, all three D-J Averages again closed simultaneously at new all-time highs. I thought these two Dow Theory bull signals were all the more powerful, since they occurred against a background that was filled with potential political and economic negatives.”
Who am I to argue with Richard Russell? However, Richard also goes on to say: “I consider this a high-priced or overvalued market. I say this because price/earnings ratios are high almost across-the-board. But just as important, dividend yields are low, very low.”
Economic cycles usually operate in boom and bust patterns and the time that elapses between these modes can be as long as 80 years and as short as five or six. We as US citizens who truly appreciate the history of this Country will have to eventually deal with all of the social, political, and economic issues facing America—we are going to have to deal with the bust whether it comes in the form of an economic Armageddon, a larger war employed to detract the masses who are unemployed, or simply a country that has come so off track as to be impotent in the eyes of the world’s citizens. If our generation doesn’t deal with the issues now, it will be left for future generations to clean up the mess. It would appear by their very actions that this government doesn’t give a hoot about the mess it’s created—otherwise they would have approached these issues with a different perspective and a more realistic timeline.
Time is Running Out
Ladies and Gentlemen it is time to stand up for America and the principals upon which it was founded. Time is literally running out. Is it possible to change the course of a great nation before it comes apart at the seams? Is it possible to stop global warming before every last polar bear is gone? I honestly don’t know. I do know that if we are to have any chance for success, we are going to have to change the way we do business.
American citizens have to elect leaders that have the courage and the backbone to stand against the barrage of Washington lobbyists who would honor the wishes of the special interests groups over the wishes of the American Public. Most importantly, we cannot allow another war to be cast upon the shoulders of America. George Tenet, past director of the CIA has just come out with a book. He denies and obfuscates. He’s been on “60 Minutes” and “Meet the Press” to promote his book. I don’t think he is denying that this Iraq War was illegal and ill-conceived. He is just denying that he was complicit in its final implementation.
We are Americans who are getting railroaded by an administration who has lost sight of the meaning of the Constitution. It is up to each and every one of us to try and right the wrongs in any little way possible.
The way to begin this healing process is that each of us has to do one thing every day to make the world a better place. Accomplish this one thought, one deed, at a time.
The Dialogue Goes On as the Costs Go Up!
The dialogue is important because it helps us to understand the big picture. Unfortunately, 70% of American families are probably just trying to make it from paycheck to paycheck while raising a family. Two jobs per household is the norm. We need to initiate and continue the dialogue in order to find a way forward as a family and as a nation. We also need to realize that costs on every level have appreciably increased to the point where they are now totally out of control.
One major problem is that many people don’t have the luxury of a financial plan because their family has lost a job, has had a medical crisis, or has a child with a disability. Illegal drugs and gangs are rampant in the inner cities and the educational system is dysfunctional. Our national infrastructure is rotting because politicians would rather apply a coat of paint than do any substantive work.
I don’t mean to come down to hard on the politicians but you have to ask yourself are they really representing your wishes in your district? Just as I’m suggesting doing something of a positive nature on a daily basis, it would appear that our elected representatives are doing the inverse of that. They are slowly, ever so slowly degrading and eroding the rights of the American people in order to form a more imperfect union which is an environment that allows them to become omnipotent. This is the antithesis of the US Constitution and the Bill of Rights.
A trillion here, a trillion there, and pretty soon you’re talking about real money!
There is laundry list of problems, each costing in the trillions of dollars to repair and they all need to be addressed yesterday! To repair the physical infrastructure of this country will cost trillions. To repair the educational system, (wherein entry-level teachers today are paid about the same amount as a farm superintendent) and ultimately spend more time “babysitting” than teaching”, will also cost trillions. To deal with the health care system and the spiraling out of control health costs in this country will cost trillions. The Iraq and Afghanistan wars will ultimately cost trillions. Inflation is rampant and government cost of living increases (COLA’s) will eventually cost this country trillions. It would appear that everything costs trillions and yet the real value of the dollar continues to decline against other currencies and of course, against gold.
We used to talk about billions in terms of these categories, but now the figures are always in the trillions. As the dollar loses its value, the numbers will continue to increase. It simply takes more dollars every year to accomplish the same tasks. The actual demise of the dollar will continue to cost this country trillions of them because of the inflationary repercussions. But of course, we will be repaying our debts in inflated dollars so who cares? We should care because that sword cuts both ways.
Immigration is a dangerous and troublesome Issue
The immigration issue is costing this country trillions of dollars. It will continue to cost this country dearly unless the borders are sealed and the issue is dealt with adequately and intelligently. Any country that cannot secure its borders will eventually lose its sovereignty. That is a truism written in stone. Even in Europe, they carefully monitor their borders.
The idea of millions of illegal citizens marching in the streets demanding rights that they haven’t earned and to which they are not entitled is astounding to me. That being said, this country would stop on a dime without their labor and we need to find a solution to the influx of these millions of people. Again, I would dare ask how many people are coming across the southern border who are not simply seeking work but are from other cultures intent on mischief. The politicos will tell you that there are 12 million illegal citizens in this country but I’ve heard the number is closer to 20 million.
Yes, we have trouble right here in River City and all the kings horses—that would be King George—and all the kings men will be happily ensconced in retirement with their loot in a nice safe area of the country. Well they may physically be in this country protected by the secret service, but their loot will be in a Swiss Bank Account. Did you ever stop to think that about 230 years ago we announced our independence from King George and now once again we find ourselves trying to assert our independence against another King George? Remember people that the government is no longer by the people and for the people—it a government by the special interests and for the special interests. That’s what happens when we take things for granted. It is a downward spiral and this immigration issue plays directly into this financial scenario on both and economic and a political front. It is costing this country trillions of dollars.
Again, I ask that you remember that all things are interconnected and nothing occurs in a vacuum. The establishment has a plan. Do you?
Lee Iacocca states it well
Yes I am outraged at what has happened to our beloved Country. So is Lee Lee Iacocca and here is the quote of the month and it is from his new book: Where have all the Leaders Gone?
"Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, "Stay the course." Stay the course? You've got to be kidding. This is America, not the damned Titanic. I'll give you a sound bite: Throw the bums out! You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies. Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don't need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions. That's not the promise of America my parents and yours traveled across the ocean for.
"I've had enough. How about you? I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. My friends tell me to calm down. They say, "Lee, you're eighty-two years old. Leave the rage to the young people." I'd love to, as soon as I can pry them away from their iPods for five seconds and get them to pay attention. I'm going to speak up because it's my patriotic duty. I think people will listen to me. They say I have a reputation as a straight shooter. So I'll tell you how I see it, and it's not pretty, but at least it's real. I'm hoping to strike a nerve in those young folks who say they don't vote because they don't trust politicians to represent their interests. Hey, America, wake up. These guys work for us. Who Are These Guys, Anyway? Why are we in this mess? How did we end up with this crowd in Washington? Well, we voted for them, or at least some of us did. But I'll tell you what we didn't do. We didn't agree to suspend the Constitution. We didn't agree to stop asking questions or demanding answers. Some of us are sick and tired of people who call free speech treason. Where I come, from that's a dictatorship, not a democracy. And don't tell me it's all the fault of right-wing Republicans or liberal Democrats. That's an intellectually lazy argument, and its part of the reason we're in this stew. We're not just a nation of factions. We're a people. We share common principles and ideals. And we rise and fall together.
"Where are the voices of leaders who can inspire us to action and make us stand taller? What happened to the strong and resolute party of Lincoln? What happened to the courageous, populist party of FDR and Truman? There was a time in this country when the voices of great leaders lifted us up and made us want to do better. Where have all the leaders gone?"
Again, that quote came from a book by Lee Iacocca titled Where have all the Leaders Gone? It can be found at www.amazon.com
The only thing that seems to get stronger is military spending but even that is not equating to a stronger military because our military is geared for a “tanks and planes war” when everyone knows that the next wars will be guerilla in nature.
Why should we personally care about any and or all of these issues? It is simply because sooner or later, the pigeons will come home to roost. Unfortunately for all of us, it may very well be sooner—as in the next five years or so. I honestly hope I am wrong. But if you are realistic and acknowledge the accuracy of what Mr. Iacocca is saying, there is but one inevitable conclusion. That conclusion is that constructive change has to begin immediately.
I repeat, everything is Interconnected
One thing that I’d like to stress today is how all of these various market and political entities are interconnected. I’ve said many times that nothing occurs in a vacuum. At this point in the history of America, it is truer than ever.
The financial markets are affected by manufacturing and housing sectors. The debt on all levels has spun out of control. As the government sector expands the private sector contracts. At one point in history, if the US sneezed, the rest of the world caught a cold. Such is not the case today.
However, I also want to remind you that at no time in the history of America have the facts been so misconstrued to the American Public. Listen, it’s always been a part of the American fabric to fool as many people as frequently as possible. Let’s not be naïve; that’s America—that’s any country where free speech is a right. The line between free speech and truth is what needs to be understood and they should not be mutually exclusive categories.
Quality Leadership has always been a challenge in this country. Realize that habeas corpus was suspended during honest Abe’s tenure; we had a crook in the White House who insisted that he was no crook after ordering a “break in” of the opposing parties headquarters, and most egregious of all was the creation of the Federal Reserve system in 1913 under the nose if not approval of Woodrow Wilson. Yes, we’ve had some “doozies” in these government administrations.
The Ship called America has always been able to right itself somehow. But ladies and gentlemen, that ship always had at its foundation at least the pretense of truth and the pretense of listening to the American People. That pretense is now gone, much as the pretense is gone regarding the “management” of the gold price.
We’ve never have we had a King until King George. My word, it is difficult to fathom.
Now Back to the Matters of Making Money
In the vernacular of the day, we all want to make a lot of money fast! It’s unfortunate because the best way to make a lot of money fast in this exploration sector is to do it slowly. It’s a paradox which few appreciate—mutually exclusive categories. However, investors who choose their junior companies wisely, and allow them sufficient time to develop their projects, are the investors who are going to make their fortunes.
Sometimes the process can take years. That in itself is discomforting. But, by the same token, there are opportunities that come along where a person can make a 50% return in a month or so. Sometimes you can make “a double” in three or four months depending upon the project and the people directing the programs. As I’ve traveled through this Junior Exploration World, I’ve learned several things. One of them is that there is no substitute for quality—in people or projects.
Another truism: It’s not what you know, it’s who you know”. So let’s qualify that last one. We need to constantly educate ourselves and perform our own due diligence. Few of us “get lucky” when trying to make our fortunes. However, good teachers are literally worth their weight in gold. Roger Wiegand comes to mind and as I’ve posted previously, he is very solid, easy to understand, and worth every penny of his subscription service. Richard Russell is of the same ilk as is Jim Sinclair.
Roger Wiegand is Editor of Trader Tracks, a weekly newsletter dedicated to trading gold, silver and energy markets using futures, commodities, and stocks.
I like Roger for the same reasons I like Bill Murphy, Bill Buckler, Richard Russell, and many of the others I’ve brought to your attention over the years. These are intelligent men and women (Catherine Austin Fitts was referred to us by Bill Murphy) with no airs. They have a tendency to spot the truth, share it with those who would listen, and they are not that worried about their egos. Sure, everyone wants to make money. But here’s the kicker. Those men and women that are down to earth are the kind of people you can have lunch with and their sole motive is not going to be to demonstrate how utterly brilliant they are and what a stupid clod you are. There is an ease in their presence. I call them facilitators. They actually enjoy helping people attain their goals in life and the best way to attain your own personal goals is to assist others in attaining theirs.
Many establishment types are actually afraid of these kinds of people because they shed the light of truth on subjects that the establishment would just as soon keep parked under the grease trap at your local burger joint.
Change is not coming; it’s here, its now, its constant and its urgently needed.
The sooner we realize that, the better off we’ll be. They say the major stock market indices look out six months in advance. While that used to be true, I think the stock market is now smoke and mirrors. If you believe there is no inflation, if you believe the war in Iraq will end well, if you believe that the last six years of US history has warmed the world to our way of life, I’m afraid you’re in for a rough ride. Common sense dictates that there is a serious disconnect in terms of what we’re being told and what is actually occurring.
This Week’s Top Ten Gold Effectors
Please recognize and react to several concepts pertaining to the Precious Metals Complex (PMC):
1. Gold is in a bull market and supply is not keeping up with demand; charts are bullish
2. There are very few people in the West who understand gold and what it really represents; fewer people still recognize why the power elite does not “cotton to” the PMC.
a.) a larger audience will be forthcoming
b.) this bull market in the PMC is five years young and has a ways to go.
3. Quality Junior Mining Companies combined with your patience will help you get out of debt (America is in debt on every level-FYI)
4. Your Patience combined with Quality Junior Mining Companies will help you financially
5. Inflation is here and now: You know it because you live it—follow your senses not government rhetoric!
6. Purchase some physical gold and silver and use it as the foundation of your portfolio.
7. Spend as much time performing your due diligence on your gold investments as you do on preparing your daily meals. Please don’t tell me you eat fast foods every day!
8. Watch the US dollar on the USDX (dollar index) carefully; dollar down—gold up
9. Recognize that the US financial landscape is smoke and mirrors: why would anyone or any entity be short gold?
10. Finally, we must all face reality and in the process create our own positive realities. We cannot depend upon a government agency to care for us; especially if we ever hope to retire.
$730 US Gold is not that far Off
$700 gold is a key line in the sand and I believe it too will fall; just as $500—then $600—then $650 also fell. Personally, I believe we will see that $700 price before the end of the summer and we may well see the surpassing of the old gold highs of about $720.00US around the same frame.
The exploration sector is the most vulnerable to these types of artificial smoke and mirrors tactics that are used to separate you from your gold and your gold positions. This is because of a lack of cash flow, and a lack of a sustainable empirical verifiable infrastructure. This is why it becomes so important to know the people behind the deals.
The Junior Sector is at the bottom of the resource ladder. The senior golds (such as a Newmont) are at the top, then the mid-tier companies (such as a Kinross) and then the Juniors such as an Oromin Explorations. There is even a group further down the ladder and they would be the pure grass roots plays that are just starting out. All quality companies are about the people and the projects. They are all about management and the people involved. Of course, at the bottom of the heap would be the moose pasture in Quebec or Africa or Timbuktu.
Why the Smoke and Mirrors?
Observing the big picture, we must realize that all elements in the financial community are interrelated. At the very bottom of the financial pyramid lies gold representing real wealth. It is the only real money that the average person can acquire, cart around, and store. Gold is still the commodity which most central banks value the most regardless of what they portray to the public.
It is amazing to me just how out of kilter things can become and how such inept people can acquire positions of power. Brown sold England’s gold at close to the bottom of the cycle and lost the Brits billions of Pounds in the process.
The US dollar usurped the role of gold over the past dozen years or so based upon the American Economy and its military. Both are now in disarray for obvious reasons and so we return to fundamentals. As fiat currencies in general become more suspect, you will find that the precious metals complex becomes more attractive.
The Power Elite has three primary goals in mind. The first is to get into power—stay in power; the second is to create a scenario wherein they control the money supply. The third is to hide the reality of both situations from their constituents.
So here is what is occurring. Everyone in a position of power understands that it is almost a forgone conclusion that the dollar is on the skids. If it breaks .80 on the dollar index, it could be a sudden drop to the .76 level. In actuality, the US establishment doesn’t really care that the dollar is falling as it helps to promote their own agendas.
A Review of Some of Our Investment Ideas
Recently, there have been some excellent buys in the junior mining sector. If you believe as I do that gold will soon break $700 to the upside, might I suggest:
1. Oromin Resources (OLEPF.OTC)
2. Buffalo Gold (BYBUF.OTC)
3. Madison Minerals (MMRSF.OTC)
4. Longview Capital Partners (LV.V)
5. Geocom Resources (GOCM.OTC)
6. Timberline Resources (TBLC.OTC)
7. Journey Resources (JNY.CA)
8. Samex Mining (SMXMF.OTC)
9. Scorpio Mining (SMX.CA)
10. Golden Phoenix (GPXM.OTC) {Molybdenum, Gold and Silver}
11. Win-Eldrich (WIDMF.OTC) {Molybdenum}
11. Norsemont Mining (NOM.CA) {Copper}
12. Alma Resources (ALV. CA) {Silver}
These are investment ideas of the “high risk-high reward” variety. I have recommended many of them in the past. I shall be doing additional write-ups on many of them in the near future. Some of the prices have been off due to a lack of bids, not a deluge of selling.
I still believe that Oromin Resources has a very bright future and the recent press release appears to bear that out. Buffalo Gold is another one that has gotten into the realm of the “ridiculously inexpensive” especially given their assets. But these ideas are just one man’s opinion and you need to do your own due diligence. I believe that the share prices of these companies will move substantially higher as soon as gold takes out that $700 level—even the silver plays.
Until Next Time,
D. Stewart Armstrong
Consultant to the Junior Mining Sector
Disclosure and Disclaimer by the Author: In the spirit of full disclosure, although D. Stewart Armstrong, Seacoast Consulting, and or Seacoast Publishing, are independent entities, they may be employed by this particular company, may own shares in this company, and this company may be an advertiser on GoldSeeek.com which is an internet site in which the author is consistently involved. Although the author is an independent analyst, he is also a paid consultant by the Junior Mining and Exploration Sector. The author is a private investor in the precious metals markets. He is not a board qualified or licensed investment advisor. All material is deemed to be accurate and to have been gleaned from reliable sources in a timely fashion; but said material cannot be construed as being totally complete or absolute. Any foreword looking statements must be considered as such and taken into account. Consequently, the aforementioned parties can take no responsibility for any investment decisions you make or the results thereof. The author does not accept responsibility for any possible errors in calculations disseminated by any company he represents or in which he is involved, nor does he guarantee or insinuate any type of investment results. Consider any and all recommendations as personal opinions on the part of the author. It is highly recommended, and even insisted by the author, that investors, individuals, and all interested parties, conduct their own due diligence before becoming involved in any investment or with the interests of any company mentioned. That process would include direct contact with the company to confirm any facts, opinions, or ideas represented by these companies in general or on any Company CD’s distributed and referred to in these articles. The author would suggest the possibility of hiring professional advice from a certified investment advisor before making any investment transactions. Again, please consider these articles as opinions and please understand that investing in Junior Mining Companies is a high-risk, high reward proposition and you must take full responsibility for your own actions because there is always the possibility of losing all or a portion of your investment capital. This disclaimer applies to this article, Email correspondences, and all communications with both public and private entities. This disclaimer is applicable to all articles and communications published previously and to ones to be published in the future.
-- Posted Tuesday, 8 May 2007 | Digg This Article
