Oldtent Archives 2007 - 2008

hey he be missing the raincoat but thats my coin dealer! he yours too?
wj

Looks like I’m gonna have a bit of back scrolling

to do in the morning.

www.kitco.com/ind/Wiegand/jan042008.html

Hello Bill!
I have received a lot of email regarding my “Endgame” comments earlier this week. Some frustrated investors have questioned why the juniors are not more aggressive to react to the situation.
One explanation that I can think of why the juniors are not more vocal to denounce the current situation is because they do not want to alienate the senior players that they are counting on to buy them out. It may be easier for them to remain silent and hope for the best. I pointed out how NG stood up to a takeover challenge by Barrick Gold last year, and then shortly thereafter the development plans went off the rails, which may or may not have been related occurences. I have seen that most development contractors have some relationship to the seniors so it would not be beyond consideration that NG was blackballed and taken off line as a reprisal. It is important not to read too much in to these things, but I am willing to consider all possible explanations.
I am not going to sell and give up on the sector now. For sure some good deposits are going to be ’stolen’ in convenient takeover deals at well below fair value, but the entire sector will probably get a boost and begin attracting more speculative interest when more takeover activity bubbles up.
I have not done the number crunching but I would hazzard to guess that the divergence in market capitalization between the senior producers and the juniors has never been greater. Or, in terms of market value, it has never been cheaper for a senior to issue share capital to acquire the assets of a junior. Whether this is by accident or by design, I do not look for leadership from the companies to resolve. Investors will have to decide if they are willing to accept less for their shares when takeover offers are launched, and juniors will have to become more effective to promote their merits and attract more stronger shareholders.
cheers!
Mexico Mike

BURMA SHAVE!

Richard Russell (Dow Theory Letters): A mighty interesting move coming up for gold
“Now that gold is at all-time highs, is there any way to tell where gold might be going? I’m going to repeat the words of W.D. Gann. Mr. Gann is considered by many professionals to have been one of the greatest commodity and stock traders (and thinkers) of all time. Here are Gann’s words (courtesy of my old New York friend, Ron Rosen).
“‘When a stock or a commodity advances into new territory or to prices which it has not reached for months or years, it shows that the force or driving power is working in that direction. It is the same principle as any other force which has been restrained and breaks out. Water may be held back by a dam, but if it breaks through the dam, you would know that it would continue downward until it reaches another dam, or some obstruction or resistance which would stop it.
“‘Therefore, it is very important to watch old levels of stocks and commodities. The longer the time that elapses between the breaking into new territory, the greater the move you can expect, because the accumulative energy over a long period naturally will produce larger movements than if it only accumulated during a short period of time.’
“It took 28 years for gold to break out above it’s 1980 high of 850. In view of what Gann says, this should be a mighty interesting move coming up for gold.”
investmentpostcards.wordpress.com/2008/01/06/words-from-the
-wise-for-the-week-that-was-dec-31-2007-%e2%80%93-jan-6-2008/

toss ment a horse head! wj

anytime i post a green smiley i know. wj

blankity blank gold up 4. bucks blankity -EDIT *&(*^%$)(&^%$$

naaa you didn’t miss any fun cause fun it twern’t. twas a pain in the arse it twer! wj

whereof I speak. Can we give it a rest, pleeze? Thought the dust had settled, but no, gotta pick at a scab - someone break out some tall cold ones and let’s chill out.

Forget oil, the new global crisis is food

BMO strategist Donald Coxe warns credit crunch and soaring oil prices will pale in comparison to looming catastrophe
Alia McMullen, Financial Post Published: Friday, January 04, 2008

A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club’s 14th annual investment outlook in Toronto on Thursday.
“It’s not a matter of if, but when,” he warned investors. “It’s going to hit this year hard.”

Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.

“The greatest challenge to the world is not US$100 oil; it’s getting enough food so that the new middle class can eat the way our middle class does, and that means we’ve got to expand food output dramatically,” he said.

The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.

Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.

Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.

At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.

This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.

“You’re going to have real problems in countries that are food short, because we’re already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they’re embargoing exports,” he said, citing Russia and India as examples.

“Those who have food are going to have a big edge.”

With 54% of the world’s corn supply grown in America’s mid-west, the U.S. is one of those countries with an edge.

But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America’s grain harvest in 2007.

The amount of U.S. grain currently stored for following seasons was the lowest on record, relative to consumption, he said.

“You should be there for it fully-hedged by having access to those stocks that benefit from rising food prices.”

He said there are about two dozen stocks in the world that are going to redefine the world’s food supplies, and “those stocks will have a precious value as we move forward.”

Mr. Coxe said crop yields around the world need to increase to something close to what is achieved in the state of Illinois, which produces over 200 corn bushes an acre compared with an average 30 bushes an acre in the rest of the world.

“That will be done with more fertilizer, with genetically modified seeds, and with advanced machinery and technology,” he said.

-END-

would this issue really have got the same coverage if our shares were up 10% on the day. I for am more than happy to go along with an editorial decision, after all its an honorary position and nobody has to post here if they dont want to!