Grant Williams: Understanding Gold - The Gold Price Is NOT The Price of Gold!

  Zero Hedge brings us the brilliant presentation from Grant Williams. This is the video which you should watch and share with everybody. Whether you are the professional trader, investor or just wondering what is going on with the economy, markets and Core Values - you can find the answers here.

 ZeroHedge: 

Grant Williams: "Do The Math!"

"In a masterclass of what is 'really' going on in the world (as opposed to what we are told/spoon-fed on a daily basis), Grant Williams (of Things That Make You Go Hhhmm infamy) provides a must-watch presentation. Starting from the premise (unusual in this day and age) that the laws of mathematics are inviolable ("if it makes no sense, it is nonsense"), the Aussie investment manager sets out his own set of philosophical 'problems' that the world of 'markets' seems incapable of grasping. In a chart-filled extravaganza, Williams ranges from "Problem 1: If the global economy is stalling, Europe is in recession, China is slowing and growth is seemingly impossible to generate, what are equity markets doing at all-time highs?" to "Problem 7: The Gold Price and The Price of Gold are mutually exclusive" leaving the participant questioning everything Bob Pisani would have us believe warning in conclusion that gold is critical and "beware suppressed volatility."

The Coming Great Gold Short Squeeze And The Fiat End-Game

"Recent attack on Gold to preserve the US Dollar Reserve Currency Status Quo has unleashed unprecedented demand for physical Gold. Major banks are defaulting on Gold delivery and premiums for physical Gold and Silver are sky high now. We are in the uncharted territory with COMEX Gold Shorts at the all time high as of now. How the markets can sustain levitation without FED QE Drugs supply we already know: even the thought about the Tapering is unbearable."

US Dollar Collapse: Crash Alert. RMK.v, CGH.to, TNR.v, SNU.v, GBN.v, BTT.v, MGN, FVI.v, OK.v, ASM.v, EPZ.v, FST.v, RVM.to, SBB.v, HUI, XAU, GDX, GDL

On weekly chart we have again serious Crash Alert. Inverted Hammer is forming - strong Bearish Candle, MACD is still at Sell, Slow STO neutral - trend continuation, RSI turning Down, bearish flag formed with recent mumbling around 84-86 levels. Next week will be crucial for resolution of this pattern. Fundamentals are slowly making its way to the trades desks. Gold is above 900 USD/oz in Party anticipation.

FT - Gold pushes above $900 in buying spree. GDX, AUY, GLD

It is only recognition of the beginning of US Dollar and other FIAT currencies debasement. US Dollar has broken down today and Treasuries continued selling off.

Yellow metal posts all-time highs in euro and sterling

Strong investor buying on Monday pushed the price of gold above $900 a troy ounce, hitting a 3½-month high in dollar terms and posting all-time highs in euro and sterling, in a stark sign of money seeking refuge from equities and bond markets.
Traders said that investors, particularly in continental Europe and the UK, were pouring money into gold exchange-traded funds – a popular way to gain access to the metal – and also noted strong buying of physical gold, from coins to bars.
Edel Tully at Mitsui & Co Precious Metals in London said gold was the “obvious shelter” for safe-haven investors.
In London, spot gold rose to $915.30 an ounce, up from New York’s last quote on Friday of $898.40. The precious metal also hit an all-time high in both sterling at £661.55 an ounce, and in euros, at €701.55 an ounce.
The total amount of gold held by the world’s gold ETFs last week rose for the first time above the 40m ounce level. Together, such investment vehicles are now the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.
“The aggressive appreciation in the ETF contracts ... is the clearest signal to date this year that gold is one of the limited assets that investors want exposure to during these frantic times,” Ms Tully said.
John Reade, a precious metal strategist at UBS in London, added that the change in ETF gold holdings so far this month, at plus 2.5m ounces, was “impressive”, but he warned that the figure fell short of the 6m ounces achieved in mid-October, following the collapse of Lehman Brothers.
ETF Securities, which provides commodity-based exchange-traded funds, said it saw record inflows last week, with $500m invested in its products in just two days.
Hector McNeil, managing director at ETF Securities, said that about 60 per cent of those inflows were into the yellow metal. “Gold is set to rise dramatically,” he said.
Tanaka Kikinzoku Kogyo, Japan’s biggest bullion house, said on Monday that sales of gold coins jumped 121 per cent last year as investors flocked to the safe-haven metal.
Traders and strategists cautioned, however, that jewellery demand was weak and noted that old gold in the form of scrap was returning to the market, particularly in India, potentially capping any price gain.
James Steel, a precious metals analyst at HSBC in New York, added that the global economy risked falling into deflation, a situation in which “historically, gold has never rallied for a sustained period”.
Mr Steel forecast gold prices at $825 an ounce on average in 2009, with any rally towards $1,000 an ounce short-lived.
In the short term, traders said gold was likely to consolidate above $900 an ounce this week and could test the $930 an ounce level previously touched in October.
Spot gold in London, the market’s benchmark, hit an all-time high of $1,030.80 in March.

Panic VIX is over, Greed is coming back. DIA, SPY, QQQQ, TSX

Panic is over, VIX is steady on its course to sub 40 levels, Rally and Inflation expectations are already coming back with fresh printed US Dollars, watch out January effect: how the month will trade so will be the year. For us here it is only the reference point of US Dollar prospects: once "its safe heaven quality" will be out of the picture mass exodus out of the flowed financial system will be the name of the game.

Treasury Bubble TLT is ready to Burst. TLT, TYX, TNX, FVX, GDX, GDL, SVL, SLW, AUY, MGN

Looks like party is over here for me, quick pit stop with bearish flag at 112.5 - 110 and then straight into the ground. Last buyers will be licking their wounds for years to come.

The manipulation of Gold Prices. GDX, GDL

Interesting:


http://seekingalpha.com/article/109210-the-manipulation-of-gold-prices

Gold Miners GDX are confirming Gold move to the Upside. GDX, HUI, XAU, AUY, ABX, SSRI, SLW

It is very important that recent break out to the upside in Gold price is confirmed by move Up in Gold Miners GDX, HUI, XAU. Chart is looking very strong: MA50 was overtaken on one breath. Rising appetite for equities is multiplied here with rising Gold price. Sector is so small, all miners GDX cap being around One Hundred Billion dollars, that money inflow could quickly bring it back above MA 200 when Technicals will confirm Bull is alive in this market.

US Dollar is a chosen victim of bailouts. GDX, AUY, SSRI, SLW

You do not need any enemies with such friends as Hank and Ben. Quantitative Easing is the name of the game now and US Dollar will suffer like a Yen during the same medicine in Japan. But it is the only medicine to by some time and get out of Deflation spiral, Inflation is the answer to all debts to be fading away with value of money.

"U.S. Details $800 Billion Loan Plans

"WASHINGTON — The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they would print as much money as needed to revive the nation’s crippled banking system...

...In the last year, the government has assumed about $7.8 trillion in direct and indirect financial obligations. That is equal to about half the size of the nation’s entire economy and far eclipses the $700 billion that Congress authorized for the Treasury’s financial rescue plan. ...


...The long-term risks are enormous but difficult to estimate. They begin with the danger of a new surge of inflation, at least after the economy comes out of its current downturn. Beyond that, taxpayers will have to pick up the losses from loans that default or guarantees that have to be made good.
But the most troublesome unknowns are how the maze of protections for investors and consumers will change economic and political behavior in the future...

...The new actions are unlikely to be the last. Until the economy begins to turn around, Fed officials have made it clear they are prepared to print as much money as needed to jump-start lending, consumer spending, home buying and investment...

...To bolster the general economy, it relied on its traditional tool: reducing the overnight Federal funds rate, the interest rate that banks charge for lending their reserves to one another. Normally, a lower Federal funds rates leads to lower long-term rates, like those for mortgages.
But the central bank has already lowered the rate to 1 percent, and it cannot reduce it below zero. Instead, policy makers are buying up other kinds of debt securities, which has the effect of driving down the rates in those parts of the market.
The move amounts to what economists refer to as “quantitative easing,” which means having the Fed pump staggering amounts of money into the economy by buying up a wide range of debt instruments..."

Gold, Silver and Miners are Up, when market is down. SSRI, SLW, GDX, AUY

Interesting US Dollar has manage to close Up today and formed "the hanging man", normally it will be a reversal pattern within our Triangle pointing to resolution downwards. Markets were under pressure in US even after Chinese stimulus package, very interesting divergence has formed when Gold and Silver manage to close positive after so custom selling pressure in New York session. Night and Morning Asia is Buying and during the day West is selling. Not today and Goldies have rallied closing strongly on positive side. Is it another sign that Us Dollar levitation magic is over? We will find it out very shortly.

Gold - Inflation expectations are rising. GDX, AUY, ABX, NEM, RGLD.

Gold Inflation indicator is still to be confirmed by decisive move up from recent Low. On a positive we have Buy cross on PPO and very strong candles. Danger here is a break down from Bearish flag. We need US Dollar to come down and implosive move in Gold up with Short squeeze, like in the beginning of September. First step will be to close above 750 weekly and then above 800.

Gold: Barron's "Shining Through the Rubble"

WITH FINANCIAL MARKETS AROUND THE WORLD COLLAPSING, about the only thing that still glitters is gold.
Unlike just about every other asset, gold has risen in the past year. Though it fell markedly last week, to $785.10, it's still up 3% from a year ago.
Gold has "shown its stripes as something investors will turn to," says Leanne Baker, founder of Investor Resources, a metals and mining advisory based in Mill Valley, Calif.

Dow Plus 936.42 +11.08%, I guess it is my Thousand Point Rally.

So far, so good:

http://sufiy.blogspot.com/2008/10/death-of-equity-or-dow-plus-1000-points.html

I have added Calls on GDX to my positions.

Jim Rogers has called what is coming as "Inflationary Holocaust".

Bottleneck for all these trillions of US Dollars and other FIAT currencies coming:

GDX, SSRI, SLW, MGN, RGLD, AUY, GG, NEM, ABX

I am expecting Fireworks this week in Junior mining sector: TNR.v, CZX.v, SST.v, OK.v, FVI.v, SAX.to, RVM.to, SBB.v, AMM.to, MAI.v.

China's Wen assures Australia of commodity demand

This is important, Demand is there prices will follow...

"Australia's Prime Minister Kevin Rudd said China has assured him that demand for Australian resources will stay strong, shielding the commodities-dependent economy from the global financial crisis.Mandarin-speaking Rudd said he telephoned Chinese Premier Wen Jiabao on Monday and was told commodity demand would hold up despite China's growth slipping from "11% and 12% down to 9% and 10%". "Part of the long-term strategy of this government, and the strategy for the period immediately ahead, is how to more deeply and broadly engage with the Chinese economy," Rudd told Australian media on Thursday.Australia is pinning its hopes on China to ride out the current turmoil on international financial markets. The country's central bank slash interest rates by one percentage point this week to try and maintain economic growth and liquidity."

TNR Gold TNR.v spins off Alaskan properties.

TNR Gold TNR.v spins off Alaskan properties in USA subsidiary in order to realise value which is not in the stock price now without expensive dilution in the company.. With recent developments interest in Alaska is rising with Barrick Gold ABX, Nova Gold NG.to and Northern Dynasty Minerals NAK. Gold vs Salmon vote has brought confidence to the mining companies in the region.

TNR Gold Corp.: Transfer of Alaskan Projects to New SubsidiaryWednesday September 17, 6:53 pm ET
"VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 17, 2008) - TNR Gold Corp. ("TNR") (TSX VENTURE:TNR - News; PINK SHEETS:TRRXF - News) is pleased to announce the incorporation of Bristol Explorations Co., Inc. ("Bristol"), a wholly owned US subsidiary. Bristol was incorporated in the state of Alaska and has obtained 100% of TNR's properties in Alaska which include the Iliamna project and the Shotgun project.
Bristol will focus on developing and exploring the Iliamna, Shotgun, and various Alaskan ventures. They have completed a $75,000 geochemical sampling program on Iliamna and results are pending.
TNR believes this new corporate structure will allow them to deliver enhanced shareholder value and focus on mineral exploration in Argentina and other areas of interest in South America. It will also allow them to participate in future developments in Alaska with its interest in Bristol, especially given the recent interest in the Iliamna region.
This news release has been prepared under the supervision of John Harrop, P.Geo, TNR's qualified person on this news release.
SHOTGUN PROPERTY
The Shotgun project is located 175 kilometres south of Donlin Creek within the Kuskokwim Gold Belt in Southwestern Alaska, an area emerging as a world-class gold district hosting more than 40 million ounces of aggregated gold resources. The Shotgun project includes a number of prospects, including Shotgun Ridge and nearby Winchester. Donlin is an intrusion-associated system and represents one of the largest undeveloped gold deposits in the world (see http://www.novagold.net/). The Company believes that there are several key similarities between prospects in the Shotgun area and that of the Donlin Creek gold deposit as well as other intrusion-associated deposits.
In July 2006, TNR announced 210.5 metres of 1.29 g/t Au at Shotgun Ridge, which led to the identification of a feeder zone and leaves the mineralization open at depth.
TNR has earned a 50% interest from NovaGold Resources Inc. in the Shotgun project. To date there has been 4,095 metres of drilling at Shotgun Ridge and 1,653 metres at Winchester.
Previous work at Shotgun Ridge by NovaGold Resources Inc. has estimated a historical resource of 980,000 ounces grading 0.93 gram per tonne (g/t) at a cut-off of 0.5 g/t (National Instrument 43-101 non-compliant resources). The geology and style of mineralization at Shotgun is very similar to the Dome area of the Donlin deposit.
ILIAMNA PROPERTY
The Iliamna property is a claim in Alaska covering 412 sq km of land approximately 100km from the highly-visible Pebble deposit held by Northern Dynasty Minerals Ltd. The Pebble deposit contains an indicated mineral resource of 31 million ounces of gold and 18.8 billion pounds of copper, making it one of the world's largest deposits of its kind. Initial target definition at Pebble occurred in areas covered by glacial overburden and/or Tertiary volcanic rocks, as is the case at the Iliamna Project. In 2000, Rio Algom carried out several phased exploration programs including an airborne magnetic survey, reconnaissance geology, and IP/Resistivity surveys. These surveys led to the successful identification of several geophysical anomalies, including the Iliamna Project. The airborne magnetic survey successfully outlined three regional anomalies: the Pebble intrusive complex, the Nushagak anomaly, and the Kvichak anomaly, which includes the Iliamna property. Following the regional geophysical programs, site-specific IP/Resistivity Surveys targeted and successfully located several anomalies that are similar in size and characteristics to the Donlin Creek and Pebble deposits, including the Iliamna Project. Subsequent drilling encountered copper-gold mineralization in an intrusive setting at Iliamna's H Claims.
A total of 1883.1 metres of drilling have been completed between 2003 and 2006. Some holes intercepted low-grade altered intrusive consistent with that which would be found near the periphery of a mineralized system.
ABOUT TNR GOLD CORP.
TNR is a base and precious metals exploration company focused on aggressively identifying new prospective projects as well as fostering work on its large portfolio of 17 properties in Argentina and Alaska. The company's focus over the next 12 months is the exploration and development of its Eureka, El Salto, and El Tapau in Argentina as well as Iliamna and Shotgun projects in Alaska.
On behalf of the board,
Gary Schellenberg, President
Statements in this press release other than purely historical information, historical estimates should not be relied upon, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. News release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
CUSIP: #87260X 109
SEC 12g3-2(b): Exemption #82-4434
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release. "

Stockmarkets meltdown, Gold is flying high. SSRI, RGLD, SLW, AUY, MTS.v, TNR.v, SST.v

Trust is broken, system is falling apart. Too many bailouts and liquidity pumping and just a few solid assets without anyone promise and IOU squared by derivatives.

FED did not cut, but Gold is flying without it! Cut will come and will add to the fire.

All financial economy is build on Trust, there are very few tangible assets left. In commodities market and PGM you have your assets in the ground, defined by drilling and not just "PlayStation kids Credit Default Assumptions", you still need credit to build a mine, but you have tangible assets in a "safe" and if there is Demand for them you can build on its economics.

Today is a crucial day: with rising systemic risk finally Gold behaved as it supposed to be in a free market without government manipulations - Safe haven of last resort. Raise more then 85 dollars in a one day trade will bring Gold to the front pagers of newspapers in the world.

HUI and XAU are supporting Gold rise and showing final break out from falling apart general markets.

Game here was simple in a hindsight now: with the first margin calls in July Funds sold where they had a profit: commodities, fueling the Bear Raid of PPT intervention in Gold market. Today when assets are liquidated in a fire sell to cover derivative obligations in a reality of a tight credit markets it is very important that HUI and XAU have "decoupled" finally from general market.

Economics of Supply and Demand are very simple here: Stock market of the world used to be 51 trillion dollars. All we need here is 5% of it. Investors today have seen that Gold has decoupled of falling financial markets. Even if the markets will turn on the Election Rate Cut and all these liquidity pumped into the system, investors are going to Buy Gold as Insurance without any counter party risk. Assume 3% will go into physical markets of Gold, Silver, PGM and other commodities. It is 1.5 trillion dollars! They will just fly. With 1% going into HUI it will be 500 billion: it means all HUI companies will have to rise in their valuation 5 times. Now even divide everything by 2 - it is still Buy of a lifetime by any means.

Once this will happen the most "crazy and greedy" investors will take positions in Juniors: lets say 1% of all these money for the HUI: it is 5 billion - Juniors will have to rise Ten fold just to accommodate these demand for the goods in the ground.

These investors will meet money from Majors in HUI when they will start to buy resources and buy time which is the most precious ( in case of AIG bailout time was measured in 85 billions and 80% of the company respectively). They will spend another 10% of their valuation 50 billion

on buying into Juniors with resources.

You can play financials recovery as usual or you can chose the staff in the ground which today has received very bold endorsement from the Mr Market. (Mr Warren Buffet must be nearby now, they do like each other).

We need just 1% of the money running out of stock markets these days.

Today's action is when picture is better then thousand words.

Silver is showing its monetary function as well and gain here will be even more dramatic once money will come back into the sector.

Bailout domino continued: Merrill Lynch MER on the street.

Rate cut will be just like gasoline on fire here for US Dollar. Gold will fly.

"Merrill and BofA begin acquisition talks
By Francesco Guerrera in London
Published: September 14 2008 22:13 Last updated: September 14 2008 22:13
Merrill Lynch is in talks to be acquired by Bank of America in a sign that the crisis gripping Lehman Brothers is forcing rival investment banks to seek partners to avoid suffering the same fate.
People close to the situation said Bank of America had entered discussions with Merrill after pulling out the bidding for Lehman in a dramatic about turn partly prompted by the US government’s refusal to supply financial help for a Lehman takeover."

Gold Market and Price Targets from Dundee Wealth Economics Toronto

Courtesy of Jim Sinclair from latest Denver Gold Show:

http://jsmineset.com/cwsimages/Miscfiles/6583_DrMartinMurenbeeld.pdf

Fannie and Freddie bail out will downgrade USA debt and US dolar better change its name.

Is it just a nightmare or we are serious here talking about "debt burden" like in any Third Word Country after "stabilising" IMF loan? With 5.2 trillion debt outstanding and 5% (we will come to discuss this figure later) interest payments by USA Corp. will be 260 billion dollars annually just to service these agencies debt, assuming that there will be no any dramatic Yield Rise in coming refinances demanded by potential buyers. To put it into perspective:

"Silver State is 11th failed bank this year.

The FDIC oversees an industry-funded reserve, which currently stands at about $45 billion, used to insure up to $100,000 per account and $250,000 per individual retirement account at insured banks."

Every year you can build 6 FDIC funds to protect your citizens savings (here I have a question - does anybody still have any?) or make every year 6 Olympics games like they did in China (40 billion spent) in six different cities across USA. It will be nice to have "Bubble" pools all across the country in couple of years time.

The quality of assets which USA Corp. gets vs this "fixed" debt obligation are under question at least: Freddie, Fannie worse off than thought Housing values are still falling down and people are going away from their properties. More and more money will be printed to cover the gap.

Another food for thought with this kind of bail out and strain on the US balance sheet what government can do in another case of "Too big to fail"? Like GM or another investment bank?

Foreign buyers have cut dramatically on their appetite for Fannie and Freddie debt just before the bail out. Now when this debt will be substituted by Treasuries does it mean that its quality will be upgraded to their "AAA" status? I will think that contrary with deterioration of Federal Balance Sheet this debt quality will be downgraded. Buyers will demand discount on these "assets" in the form of higher yield. Next thing we will have to watch is TYX 30-Year Treasuries Yield, time of historical lows for the yield (now at 4.276%) is over, welcome to the 70s when Yield raise from below 8% in 1977 to over 14% in 5 years time. Should I remind how Gold behaved in those years?

Everything must be taken in comparison: recent intervention by central banks before "Operation Bail Out" was portrayed as "comparative" advantage of USA economical situation vs Europe troubles. I dare to think situation is different and magnitude of this intervention in the "free" markets will not be challenged by any other economy in the world or for this matter by all of the rest world economies combined. Europe CB and Bank of England have hold their respective rates at 4.25% and 5% last week. According to Jim Rogers China has raised its interest rates 7 times and increased Banks reserved requirements 15 times (!) in order to prevent overheating in the economy and take out pure speculation from its long term rising stock market.

Recent manipulation has brought new opportunities into the market :

1. Time is to sell USD assets using recent spike in its value.

2. It is The Inflation, forget about deflation and let FED to worry about it.

3. Sell Treasuries, buy Gold, Silver and commodities.

4. Emerging markets could be carefully considered on case by case bases as wave of new credit will penetrate the boarders.

5. Could not resist: this recent USD spike is not in favor of Google GOOG on shrinking market it has getting a nice boost from its overseas operation with falling US Dollar. Without that tail wind results are going to be on track showing slowing rate of growth further.

6. Oil is too political for me to consider any trade here, Saudi friends will help old buddies try to stay in office and can pump like there is no tomorrow, but long term life is going to be more like in 150-200 range at least.

"NEW YORK, Sept 4 (Reuters) - Foreign central banks reduced their U.S. agency security holdings at the Federal Reserve by $9.75 billion in the latest week to a total of $958.57 billion, according to data from the central bank released on Thursday.
The data may add to recent evidence that overseas investors are worried about the troubled mortgage giants.
The drop marked a seventh straight week of declines in offshore central bank holdings of bonds issued or guaranteed by government-sponsored enterprises like Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), which have recently taken center stage in the U.S. housing crisis.
Overall, the Fed's holdings of U.S. Treasury and agency securities kept for overseas central banks, including Treasury notes and bonds as well as agency securities, fell by $13.48 billion to stand at a total of $2.395 trillion in the latest week ending Sept. 3, the Fed data showed.
Overseas central banks reduced their Treasury debt holdings by $3.72 billion to stand at $1.437 trillion.
Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years, and own over a quarter of marketable Treasuries."

Jim Rogers on Fannie Mae FNM and Freddie Mac FRE bail out

This was recoded before recent decision:

http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vIQvD7yNni2I.asf

How to Play Commodities, Gold and Silver Market from this consolidation stage. CS

As usual here are only my thoughts - in order to convert them into money you need discipline, desire to learn and action. One small obstacle before you will proclaim yourself next Sir Warren - you need capital. If you are looking for bets to leverage your house upon these ideas are not for you. Never play with your house or even lunch money.

To read further you should buy my reinflation approach: all markets are oversold, managed devaluation of USD is the only cure from complete financial disaster in USA, in order to resolve dead freeze in the credit markets all central banks are pumping liquidity like crazy. Debase of USD will provide solid support for all Hard Assets; Gold and Silver as store of real value will benefit the most. The good news here are that now all governments joined the game after Canada's and Bank of England rate cut. People will realise that game of musical chairs: who will devalue most to protect the export trade will left no single "solid" FIAT currency, inflation is eroding value of currency, any increase in money supply is inflation. Now we are talking about bail out of the housing sector in USA, it means huge moral and financial hazard in form of easy credit one more time. I still think that China stock market will correct 20%-30% from here just to get to the solid uptrend line. But do not confuse yourself with crash in the market and China's economy. It is planed economy: all those bridges, roads, ports and power stations are planed. They will always punish foreigners and even domestic speculators by cooling the market, but will never let their Bull in Infrastructure to stop. It is the only defence against USA losing its World Power status and against poor rural people of China's upraise. If flag ship of "free trade" is talking and making bail out of poor Friends from Wall Street (I hope you are not seriously thinking that somebody is taking care about fox from Alabama, otherwise buy treasuries), what will prevent China from use its 1.5 trillion reserve mostly in paper USD nominated assets? I do not take End of The World approach here: before it will happen you will be able to lose your capital few times, so stay concentrated.

Next most exiting gains will be realised in Junior mining sector, which is extremely oversold now and providing very good Entry point. Junior mining is very small, risky and volatile sector, but it is exactly what you need to make money.

Junior mining cycle is well described in latest Sanu Resources SNU.v presentation visit their site. We need trusted management, initial resource base and their ability to rase money and extend resources. If it is exploration company without any NI 43-101 resources it is more risky play, but pay off in case of discovery will be handsome. To increase your chances go for management with proven track record, exploration on old mine camps closed due to low prices and historical resources, which hopefully could be confirmed. You have double leverage of rising underlining commodity price and increasing resources base. Recent problems with Nova Gold have shown that marginal economic projects will stay marginal, rising cost of building mine and of production will put them again on hold before higher commodity prices. It is a good thing if you do not own this stocks, it means that all that excess supply will never materialise, you can not switch your decision to build mine like traders are changing their mind: it is billions of dollars and 7-10 years of hard work. So this lesson teach us that we should always diversify in this field and go for political risk in order to reduce technical risk: not so many discoveries are made, not every one of them will become a mine. My own track record with Tenke Mining TNK.to is providing support for my educational efforts. I was blessed to accumulate starting from 0.9CAD and this last April it was bought out by Lundin Mining LUN.to LMC for 25CAD. Now I think Lundin Mining LUN.to LMC is presenting itself very interesting take over play. I will mention few companies here, disclosure: I have positions in all of them. Search my blog for more information availible. Almost all of the mentioned companies updated their presentation, study before making any move.

TNR Gold TNR.v - very risky long term hold position - call on Gold and Commodities upside without time decay: no resources yet other then historical, but recent developments are very interesting. Management has changed strategy and will explore most promising properties in Argentina by themselves: namely El Salto is under drill now, Eureka and El Tapau will be early in next year. Los Azules property is going into feasibility stage and operator Minera Andes MAI.v has started new drilling programme. Now they have found serious money supporting their new strategy, more institutions are coming on board via Pasific International. Management is buying themselves and new website is showing serious investment relations approach. Recent spike and going into accumulation stage is presenting very good Entry point and was due to unfolding 5mil shares position of Tenke Mining which was transfered into Lunding Mining. Lundin Mining has position in Suramina Resources SAX.to which is concentrating their efforts on Cerro Cuadrado project, more below. Hari Varshney has came on Board of TNR Gold, his family is behind Mantle Resources MTS.v backed by Lundins. Needless to say now after all words sad drill results will matter and mineralisation hit at El Salto could change the stock overnight.

Lundin Mining LUN.to LMC - take over play in basic metals sector. Very good Entry point now with Zinc, Lead and Copper under pressure due to world wide recession fears. Recent and coming Fed rate cuts will propel commodities prices further, resolving of Congo Tenke Fungurume will catalyst new Bull Leg Up here, new mine Aljustrel is coming into bottom line as well. It is best commodity mix in the Old world: Cu, Zn, Pb, Ni in Europe with huge calls on Cu-Co in Congo and Zn in Russia.

Silverstone Resources SST.v - new Silver Wheaton SLW in the making. Just recently PP of 50 million was done at 2.9 CAD almost overnight. Now you can buy below Big Guys who are trying not to miss second chance. Lundin Mining and Capstone Mining CS.to are holding 38% of the company between themselves. Call on Silver without time decay. Aljustrel put into production by Lundin Mining will ignite the new run and market is waiting what recent financing was made for: new silver stream is in the making for sure and this recent bearishness is the best time to strike a good deal.

Sterling Mining SRLM.ob SMQ.v - famous Sunshine mine is coming into production again. Impressive resources are now confirmed by NI 43-101 and management promise to start the mine by Xmas. It did not came without the price: few recent financings put Fully Diluted float into over 50 mil shares and put stock under pressure - it is now very good Entry point to play this metamorphose into Silver producing company. Watch the video on site.

Suramina Resources SAX.to - another Lindin play on South America this time. The company took all SA assets after Lundin Mining take over of Tenke Mining. Recently resources at Jose Maria were increased. Company now is very active on the border of Argentina and Chile on new Cerro Cuadrado discovery silver-lead-zinc. Vicuna is a copper-gold porphyry and third major project at the moment. Go to http://www.caseyresearch.com/freeResearch.php

register for Exploration league and read interview with CEO Patricio Jones. The guy was behind Bajo de la Alumbrera and Veladero discovery and development. He is talking about Argentina and "Cerro Cuadrado is going to be a mine"

Avino Silver and Gold Mines ASM.v - Regarding AVINO Silver ASM.v I am still holding the position, this is the long shot: I am dissapointed with their progress, looks like they need new blood to get the full potential. Now at this level only their infrastructure cost more then market cap: all resources are "free". Problem here is that they never reported new resource estimations: results are good, grade is OK, but we need resources and final push out in this company. General for Silver December will be ignited month in new Leg up according to my charts.

Continuum Resources CNU.v - has took a hit recently when they was not able to establish J/V on their optioned property Natividad in Mexico. Now stock is traded at level below latest PP and only value in San Jose property where Fortuna Silver is operator accounted for. Among shareholders are Sprott with 19%, Agnico-Eagle with 15.3% and Fortuna Silver with 8%. Any positive change in Natividad status will push stock higher. Market is not giving any value to their other properties in Mexico.

Sunridge Gold SGC.v - is a Lundin Mining strategic investment in Eritrea Africa. Lundin Mining owns 16% of the company. Just recently company issued encouraging "Sunridge Gold Announces Indicated Resource Estimate For Emba Derho Vms Deposit"

"Sunridge Gold Corp. (SGC/TSX.V) announces an initial NI 43-101 compliant independent resource estimate for the Emba Derho zinc-copper-gold volcanogenic massive sulphide (VMS) deposit, on its 100% owned Asmara Project, Eritrea. This estimate is almost entirely in the "Indicated" category, with the total combined Indicated resources in the primary zinc and copper zones containing 1.7 billion pounds of zinc, 735 million pounds of copper, 402,000 ounces of gold and 15 million ounces of silver. The deposit is still open, particularly to the northwest. The estimate meets the Company's stated objectives in terms of size, average grade and the potential for a large open-pit operation."

Mantle resources MTS.v - another Lundin Mining strategic investment with just under 10% participation.

“Mantle Resources Inc.’s Akie deposit is a sedimentary exhalative (“SEDEX”) zinc-lead-silver deposit formed during one of the great ages of zinc mineralization. Another SEDEX zinc-lead-silver deposit of the same age that formed under very similar geological conditions to Akie is the 'Giant' Red Dog deposit, operated by Teck-Cominco and located in the Brooks Range of northern Alaska. Red Dog is the largest zinc mine in the world and is one of the largest accumulations of zinc+lead mineralization – more than 32 Mt contained zinc+lead metal.”
- Neil O’ Brien, Senior Vice-President of Exploration and Business Development, Lundin Mining Corp.

Lawrence Roulstone:

http://www.mantleresources.com/032006/files/en/asp/ir/pdfs/Mantle%20May%2007.pdf