Is there a new currency in our future?

Watch this video on a New U.S. currency

It's only a joke but eventually after default or "harmonization" with Canada and Mexico there will be a new U.S. currency, is this a taste of things to come?

Canadian Silver Bug- Feb Musings

It seems that every day for the last week or so Silver and Gold keep getting attacked in overnight trading in Europe, it would open down in New York and spend most of the day trying to gain back its losses. The good news is they have held up very well and won back their losses every time.

Various chartists have been calling for a correction especially if gold could not hold 900, but in the last few days Gold fought off the attacks and closed above 900, just short of 910 and looks to be closing the week around 923.20. I’m really quite happy about silver recently in the recent attacks it usually dropped less than gold and had robust recoveries leaving us with a Gold/Silver Ratio at 53.74 which is still a fair ways off from my predicted 48 ratio if my target prices of $1200/$25 are to be met but it is the first time in the last year we’ve consistent narrowing which is very promising.


Silver has closed at $17.18 for the week despite the chartists, we’ll see how they interpret this weeks actions and whether they will change their tunes. That said, eventually we will have a correction and provided I don’t get caught in a labour dispute this spring I will be buying strongly again if we should go below $15, and would probably even borrow some small amount to buy under $13.50, but I don't expect to see that level every again.

When an eventual correction does comes it could easily be a 10-15% drop, but if we gain another 10% before that correction arrives it won’t have been much of a buying opportunity, will it? If you don’t expect some calamity (like my potential strike) don’t worry about prices at these levels just worry about how much you have and how much more you can buy. In the big scheme of things, 3-4 years from now the difference between $830 and $930 gold or $15 and $17 silver will be laughable when we are talking $2000 gold and $100 digit silver, buy while you can if you have cash or create a monthly buying plan and average your price out.

There are a few things are a few things I don’t understand right now, the recent reductions in the US Fed rate do not seem to have made any difference to the U.S. dollar index. Is someone supporting the dollar behind the scenes because it should have taken major hit from this kind of rate reduction?

The recent U.S. budget was announced at whopping $3.1 Trillion, up 6% from last year, with claims it will keep the economy and the military healthy and happy. In reality the economy is faltering, government revenues will shrink for the Feds the same way they have for many U.S. states during the last year, there will certainly be more stimulus packages, more disaster funding, more people on unemployment and pensions yet they claim the budget will balance buy 2012. Do they really think people are that stupid???? This is the begining of an attempted reinflation that will cause high if not hyper inflation.

In Canada, the GI Joe wanna be Conservative government has spend so much on new military hardware and tax cuts that we can expect a deficit for the first time in nearly a decade. While I do not agree with their stance on many social issues they are least conservative stances like their name, but just like their neo-con buddies down south this crowd of idiots has no idea what fiscal conservatism is. DON’T SPEND MORE MONEY THAN YOU HAVE. PAY OFF YOUR DEBTS. They are not true conservatives just as the Bushites are not real conservatives, what they are is even beyond what I'm willing to put in print, and my standards are pretty low. Whoever takes over from Harper and his clowns will need reclaim a decade of fiscal progress that has been ruined in 2 short years. For the third time in my voting life, non conservative politicians will be forced to act fiscally conservative to fix conservative mismanagement. What a screwed up world.

It seems the financial woes of the world are beginning to go mainstream with recession mentioned daily in the news and a few brave souls have even said the D word (Depression, and not the kind that Prozac fixes).

A new documentary I.O.U.S.A following U.S. Comptroller General David Walking quest to inform the public of what their politicians will not opened at the Sundance film festival in January. Watch for it to enter general release.

I really have to say I’m quite pleased with this trend of documentaries making the main stream. Love him or hate him, Michael Moore has done everyone a great service making documentaries vogue. It’s a shame however we lost Aaron Russo, Freedom to Fascism was a great movie, I'd recommend anyone who has not seen yet to go out and rent it. Even better buy a copy of both of these movies when available and loan them to anyone you can convince to watch them.

Keep a watch on the junior miners, there are still a couple weeks left for Canadians to buy their RRSPs and there are still some damn good deals out there, make the move while you can. In the next weeks I will talk about several companies I've purchased for this years contributions, including Impact Silver, Farallon Resources, Accadian mining and Silver Corp.

Abcourt Redux?

A couple of weeks ago I did an article Abcourt Mines, or why should I bother? which I thought was a fair but grouchy explanation of what Abcourt has and what I don't like to see in a junior miner. While I'm not ready to forgive or excuse their bad time lines, poor planning and just plain crappy investors relations I do in all fairness need to comment on their most recent news release, dated Feb 1.

The release announced the purchase of "flotation and grinding mill equipment plus all accessories including bins, conveyors, cyclones, pumps, tanks, overhead cranes, lime and reagents circuits, electrical circuits, a gravity circuit with two 30" Knelson separators, spare parts, etc, has been accepted. The whole for an amount of $1,375,000." I understand that this is previously enjoyed(used equipment) in good shape that must obviously have a both a cost and time savings compared to new. As such it should advance the project and spare us from new share dilution, yeah!!

They further state that between this purchase and existing plant they now have 90% of the equipment needed to start productions. The new/(used) equipment will be broken down and shipped to Abcourt starting in May making their constantly pushed out target of production in 18 months seem at least feasible.

My big concern is Abcourt's glaring omission in the news release; what is the 10% of missing plant? How available is it? What is its cost? Is Abcourt in negotiations to get this mystery equipment?

Having 90% of the plant in place is fine and all but if something vital to operations is still unaccounted for, give us the information. Arrgggg!, opps getting grouchy again

This announcement at least gives me some small hope that I will eventually get out from under this position without a loss. Is Abcourt a buy? Probably, but I’m too annoyed to bother right now, if it's still under .50 when they announce rest of the plant purchases and permiting, I'll probably step up and buy some more.

Canadian Blog Awards 2007- results

I'd just like to thank my supporters (your phony fiat money is in the mail) for their votes and hope that my second place showing in the Canadian Blog Awards and my growing number of hits is a sign that people are beginning to see the financial storm on the horizon. I’ve learned much in the last 16 months and hope I’ve managed to pass some of that knowledge along without offending the grammar police too much. This was a widely varied category with a number of strong blogs and since the Silver/Gold niche is still young, so hopefully I’ll be back next year!

Congratulations to Idea Drunk who won this years contest.

More than the Ice Caps are Melting Down

U.S. Fed Rate

I'm not in the least bit surprised by last weeks .75pt cut or Wednesday's .50 pt cut of the U.S. Fed rate, I'm well on my way to meeting my prediction of a 2.0% rate by years end, hell the way it's going it could by the 3rd quarter.

What I am wondering is how such a large cut over such a short period of time has not hit the USD index much harder? Yes, the Canadian Dollar and other currencies have strengthened over the last 8 days but I'm quite surprised they did not rally much higher, obviously the market expects the BoC and other central banks to echo the U.S. cuts. While I think other central banks will cut I do not believe anybody else will be so aggressive.

Stimulus

The $150 Billion stimulus package has passed the first hurdle in the Senate Finance committee receiving only a few tweaks on who gets how much. The revised package now sizes out at $157 Billion but what's a few more billion compared to the $9+ Trillion of the official federal debt.

The Senate was good however and made only a few small changes that could keep the package from being OK'd by the full Senate or vetoed by Bush. As I stated previously this is just the first of several packages that will get rolled out as the economy unravels further and those idiots soon to face re-election become panicked. House of Representatives Speaker Nancy Pelosi has already stated that if needed more stimulus will be created.

Buy votes, create more debt, encourage more unsustainable consumerism and move towards hyper inflation all at the same time, you can't claim this bunch is underachieving.

The next big issue

As I touched on a couple of weeks ago the next wave in the overall financial crisis (Bond insurers)is cresting and will soon wash away 100s of billions in value as bond insures lose their high credit ratings and report more loses. Just today Bloomberg reports that there is belief in the market that MBIA Inc. and Ambac Financial Group could be facing another 11.6 billion dollar loss EACH. To further make my point rating agency Fitch hit Financial Guaranty Insurance Co, the worlds forth largest bond insurer, with a rating cut from AAA to AA, following their earlier re-rating of Ambac to AA and Security Capital Assurance Ltd to A, only a couple of steps above the Magical Junk category that would force massive sell offs by regulated pension funds that must hold investment grade bonds.


It appears Fitch is the only rating agency even attempting to do it's job. When this all washes out their marginally more accurate ratings will give them an advantage on the other agencies, provided any of them survive the eventual lawsuits.

I got too tired to finish this post only to find another pertinent article first thing Thursday, as MBIA announced it's loss of $2.3 Billion or 18.61 per share. Read the article, I honestly don't think they can raise new capitol as fast as they can lose it.

Metals

You have to be happy over the performance of Silver and Gold since the New Year with both metals avoiding any large correction or rigged sell off. Ted Butler must be jumping for joy at the losses the Silver shorts are taking, in his most recent interview/article he claims that the Silver shorts have taken 3 Billion in loses since the beginning of the year. If the big anonymous shorts are the Chinese they won't even blink but if this turns out to be a bank or banks already hurting from mortgage exposure then it's going to hit the fan pretty soon.

If you're in the mind to buy some silver, this is the time despite the recent highs. If one or more of these mystery shorts is required to cut and run the price spike would be significant. I don't see the possibility of more than a buck or two downside this year but I see $10 or more upside. That sounds like pretty good odds to me.

Miners

Fear that the bull is just a fad or is soon over has left the juniors underperforming the metals by a good margin. I don't believe the bull is over and yet and I'm seeing small producers’ way off their two year highs, and exploration plays down significantly from where they were when I started this blog.

Silver is at a post Hunt Brothers high, gold at a )non inflation modified) all time high and yet small companies with financing in place and a solid plan for production are getting no respect. This is the buying opportunity of a life in my opinion. Pure speculation plays will still rely on “hot tips”, pumpers, drilling results for movement but there are many choices with a compliant resource in place that should move up markedly from these lows. If the U.S. Fed keeps pumping inflation and debasing fiat money then eventually simply having gold or silver in the companies name will attract the sheeple investors. When that happens the sky will be full of money and my garage full of fleeces.

TAX time

It's RSP time Canada, consider putting some of your new money into mining juniors, a gold index, a physical gold rsp by questrade. Even consider leaving some small portion of your expected contribution outside a RSP in physical silver.

It's wild and crazy out there these days, be safe and trust nothing the TV or the Gov tells you about the markets.