Jim Rogers: "I am not selling my gold," TNR.v, RMK.v, CGH.to, SBB.v, OK.v, MGN, FVI.v, BTT.v, GBN.v, VTR.v, RVM.to, HUI, XAU, ASM.v, EPZ.v, KTN.v

Are you selling Gold?

We are taking threat with Swine Flu seriously here, so always check your temperature before any financial decision, but if you think: it is scary on this Gold chart - wait until we talk about treasuries. Some people with vested interests will try to talk you into a Double Top in Gold on the chart above, but we see the Gold in a Cup and Handle formation, as we have mentioned before, and it is a consolidation pattern before the move to the next level.
Here Green Fellow is just falling apart, bearish flag and rolling top are all over the place. Unusual high altitude resulted in dizziness and he is pleading to come down. General Bernanke and his One Thousand and One relatively honest methods: how not to repay in full on outstanding IOUs - are not helping either.

It is on this Long Term Treasuries' chart where the scary things are coming together: panic about Swine Flu must be taken over all Pension and Insurance Funds managers: after rush into treasuries in December 2008 at precise Top - this phase looks like total meltdown. All these guys are sitting on huge paper losses and their solvency is under very big question for our unsophisticated taste. Now, after some meditation on all these pictures of what is really going on in the market place, IMF loud discussions about selling Gold are getting a new meaning and Jim Rogers as usual gives us hint or two on the real matter of things from his must be gold plated bunker in Singapore.

We have already mentioned that US Dollar is seriously in doubt about its own future, last week, apart from Swine Flue scare, was the week when Treasury was selling more then 200 billion new IOUs. Dollar went under pressure and Treasury Bubble continues its musical chair game on the way down. It is important to understand that all those money, which came into treasuries in December, 2008 at the top will be a dead wood until maturity. Pension Funds and Insurance companies are sitting on huge losses after their flight to "safety" of US Treasuries. Now all this talk about helping poor nations is melting under our sceptical eye: timing is very convenient to bail out banks, which are shorting Gold on Comex and not able to deliver it ever. We do think that Gold is just before the next very important move and should they actually sell part of IMF gold and suppress the price - it will be the last sale of the century. Please, anyway, before you will decide to buy all IMF gold to be sold check out that it is not your lunch money and otherwise enjoy our investment simulator ride on this blog in safety of your own house and lunch will be still available for you when you will get hungry.

INTERNATIONAL.

"Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said he is concerned some institutional gold reserves may be sold, affecting prices in the short term.
In an interview with Bloomberg radio, Rogers said: “I own some gold, but I am not buying at the moment because the IMF, which is one of the largest owners of gold in the world, is desperate to sell its gold.”
“I’m not selling my gold,” Rogers said.
The IMF “is trying to get permission from everybody,” Rogers added.
“If and when they sell their gold, they may set a bottom. Who knows? It may go down to US$700. They got a lot of gold to sell. If it does, I hope I’m brave enough and smart enough to buy more.” In an earlier interview Rogers said whether the IMF sells gold or not, the world is expecting them to sell it.
G20 leaders agreed earlier this month that the International Monetary Fund (IMF) should sell gold from its reserve to help stimulate the world economy.
"Additional resources from agreed sales of IMF gold will be used, together with the surplus income, to provide US$6 billion additional concessional and flexible finance for the poorest countries over the next 2-3 years," a G20 statement said.
The IMF’s board approved a proposal in April 2008 to sell 403.3 metric tons of bullion as part of a plan to close the Washington-based lender’s annual deficit.
The IMF is the third-largest holder of gold reserves after the US and Germany, with 3,217 tons in deposits, according to the World Gold Council (WGC)
Rogers has spent a career being one step ahead of mainstream investment thinking. Amongst his many accomplishments, Rogers was co-founder with George Soros of Quantum Fund. During his ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%.
Rogers retired from Quantum in 1980 and became a guest professor of finance at Columbia University Graduate School of Business and in 1989 and 1990, the moderator of The Dreyfus Roundtable and The Profit Motive with Jim Rogers. In 2002, Rogers became a regular guest on Fox News' Cavuto on Business. In 2004, Rogers wrote Hot Commodities.
In 1998, he founded the Rogers International Commodity Index and in 2007, the index and its three sub-indices were linked to exchange-traded notes under the banner ELEMENTS. The notes track the total return of the indices as an accessible way to invest in the index. In 2008, Rogers co-founded the Rogers-Van Eck Hard Assets Producers Index, an equity index focusing on pure play commodity producers."

US Dollar collapse, Gold and PIIGS: Swine Flu Finally Strikes the Wall Street TNR.v, GRC.to, SGC.v, NGQ.to, KTN.v, EPZ.v, BVG.v, BVA.v, VTR.v, GBN.v,

Everybody is scared by Greece and rightfully so, but do not miss the big picture with all worries about PIIGS and their health. PIIGS: Portugal, Italy, Ireland, Greece and Spain are on the front pages and everybody is buying Treasuries again, US Dollar has surged to the new highs and Euro has hit the 1.28 Our contrarian soul can not help, but to put a few charts for review. The main message is in the chart above: P&F is not the ultimate Crystal Ball, but works very good defining reversal in trends and recent trend for US Dollar was up. US Dollar destiny now is to be "less bad" - as Jim Puplava has put it. Austerity measures are not very popular as Greece has shown to the world today, US Corp. will not even dare to go there - the only other way out is to inflate your debts out. US Dollar destiny is to go down and Treasury Bubble is unfolding already from late 2008 as shown on the chart below. We have a lower highs and scared public is rushing to the "safety" of Treasuries exactly at the wrong time. And by the way Inflation is already here: China is tightening, Australia is hiking rates, Brazil, Norway...have you noticed - all Commodities and Growth related countries. The irony is that Greece is the prelude of what could come to the US shore: can you imagine to lose California? In Euro zone idea of its breaking up does not work exactly with the opposite reason to Euro move these days: take out PIIGS out and you will get the strongest Euro possible. Competition is now - who will debase its currency faster and everybody are in for orderly decline of US Dollar: Euro below 1.2 is a threat to stability and rising borrowing cost, above 1.5 makes export less competitive - the winner will be Gold, against which all currencies will depreciate. Second best will be commodity based Canadian and Australian dollars. Have you noticed that CAD was on parity with USD again? Canada talks about tightening and rate differentiation will put further pressure onto US Dollar. Financial system was tested with Lehman - it is insolvent, another run on the bank will break it beyond repair. Our take is that Greece will be bailed out, crisis contained and ECB has not even started QE, the fastest move could be to purchase sovereign debt from the banks to provide liquidity and support the prices. Wait until attention will be back to the homeland issues and mention the difference: Europe talks about Austerity, Cuts and Budget deficit before they start to print money by QE, U.S. use helicopters first and talks about deficit later. Regarding Swine Flu we will refer to our older post and will remind ourselves how many worries we had about unavoidable pandemic, which will spare only the Wall Street with inherited immunity. It finally strikes at unexpected location and Goldman Sachs is the first victim. Its omnipresence is understandable, they are doing the "God's job" after all...but who knew that they helped to cook the books even in Greece to get it the ticket into the Euro zone?

Treasury Bubble is still unfolding from late 2008, we have lower highs and recent PIIGS scare has brought more volume.

US Dollar is overbought, particularly after today's trading session, MACD shows lower highs with new highs - points to potential reversal to be confirmed.

Please notice that Gold recently was rising with US Dollar rising as well, Gold was rising against all currencies and it is a very important new development in the Gold bull market. Seasonality is against strong upside move in Gold, but after our signal Sell in December, Gold has perform reversal and has all technical strength to break to the new highs from Cup and Handle formation.

On a longer term chart we can tell that US Dollar is ready to produce Sell signal with counter move in Euro from oversold position with solid bail out news on Greece this week.

This is our Cup and Handle formation, which could propel Gold to the new highs: we have a Buy signal on MACD - the risk is to produce double top instead. Our wave count from recent inverted Head is the wave 5 up.

Political stupidity should not be underestimated, but we have a very good chances for US Dollar to resume its downward trend, helping fragile jobless recovery in U.S. Gold will make new highs in this case this year, another thing to worry will be price of Oil and Commodity prices in general - Jim Puplava talks about buying Electric Car and we better listen!

US Dollar Collapse and Inflation: China Says Global Easing Policies Risk Devaluation. TNR.v, RMK.v, FVI.v, OK.v, ASM.v, CGH.to, BTT.v, KTN.v, EPZ.v,

Do not panic, but we are close. Hello! Look who is talking now. After Jim Rogers and Warren Buffet, guys who are holding the deck sound very suspicious. Did they finally get it? What were they thinking before - that they were buying this?
The biggest secret kept from the public about Swine Flu is that it has already spread all over the world. According to medical reports Flu virus could stay as long as ten days on banknotes and be passed along with them. What they forget to mention is that banknotes are mutating under the heavy exposure and now these banknotes could be already spread all over the world.

Chinese are sounding Alarm, what is next? Will they put all bucks in quarantine from their reserves? We do not know for sure. In trading it is called to talk the book, but why damage their own trade? Chinese are supposed to hold the largest amount of US Treasuries. Do not count that they are stupid, we will be surprised one day and it looks like very soon. Signs are all over the place: they are buying Copper for strategic reserves, Gold for currency reserves and settling trade with Hong Kong in local currency. We were always not at ease with the fact that communist China is holding keys from Financial Health of the US Corp. Now when US consumers, which are still leveraged in debts up to the eyeballs, can not buy any more all those Chinese goods and Auto sales in China surpassed those in USA, should we be really worried?

We are raising our Crash Alert to Pandemic level and recommend to check your wallets whether you have any mutated bucks already. In any case precaution is recommended: Do not kiss any Pigs, animals or otherwise. Stay healthy and wise.

P.S. "Big consolidation" in polite Chinese - means Treasury Bubble Crash, higher real rates and Inflation.

"China Says Global Easing Policies Risk Devaluation

By Sandy Hendry
May 6 (Bloomberg) -- Global central banks risk inflation, currency devaluation and a “big consolidation” in bond markets by pumping cash into their economies, the People’s Bank of China said in its quarterly monetary policy report.
The Federal Reserve and the Bank of England this year started quantitative easing, or printing money to buy government bonds, a policy that the Bank of Japan pioneered to revive its economy at the start of the decade. The European Central Bank’s 22-member board, which meets tomorrow, is split on whether it should buy financial assets to tackle its recession.
“A policy mistake made by some major central bank may bring inflation risks to the whole world,” China’s central bank said in the report today. “As more and more economies are adopting unconventional monetary policies, such as quantitative easing, major currencies’ devaluation risks may rise.”
Chinese Premier Wen Jiabao expressed concern in March that the dollar will weaken, eroding the value of China’s holdings of Treasuries, as the U.S. borrows unprecedented amounts to spend its way out of recession. China’s Treasury holdings climbed 52 percent in 2008 and stood at about $744 billion as of the end of February, according to U.S. government data.
“In the medium and long term, as the financial markets stabilize and economies gradually recover, increasing inflation expectations, rising interest rates and central bank’s liquidity-absorbing operations may cause a ‘big’ consolidation in bond prices,” the central bank’s statement said.
Bernanke
Federal Reserve Chairman Ben S. Bernanke told the congressional Joint Economic Committee yesterday that inflation will “remain low” even as a recovery gets underway because businesses will be slow to build back production and payrolls.
ECB council member Athanasios Orphanides yesterday said the financial crisis needs “drastic” measures. Orphanides and fellow member George Provopoulos from Greece have indicated they may support cutting the target rate to less than 1 percent and buying debt to pump money into the economy.
ECB Executive Board member Lorenzo Bini Smaghi said on April 28 that policy makers should be “wary of the possible side-effects” of unconventional measures.
The euro may rise against the dollar because ECB policy makers will probably decide against introducing so-called quantitative easing when they meet May 7, Bank of Tokyo- Mitsubishi UFJ Ltd. said.
“The failure to move to quantitative easing in the near term should help support the euro, especially against the dollar, given the Federal Reserve’s contrasting aggressive monetary easing approach,” Lee Hardman, a foreign-exchange strategist in London at Bank of Tokyo, wrote in a note yesterday.
To contact the reporter on this story: Sandy Hendry in Hong Kong at shendry@bloomberg.net Last Updated: May 6, 2009 07:21 EDT"

Fortuna Reports Record Revenue of US$ 8.98 Million and a Production Cash Cost of US$ 0.10 /oz of Silver in Q1 2009. FVI.v, CDNX, SLV, HUI, XAU, SSRI

Technically we have a very positive picture here: MA50 at 1.02CAD must be challenged first and then 1.25 - 1.5 at resistance is open with gap weekly to 2.0CAD. All momentum indicators are positive.

We are monitoring situation with Mexico: who will consolidate the game there? Pan American Silver PAA.to has moved into J/V with Orko Silver OK.v. Will Fortuna Silver FVI.v become a prey or continue to be a predator? Avino Silver and Gold Mines ASM.v is doing nothing now and it is not an option in this market, Esperanza Silver EPZ.v has interesting property in Mexico as well.

Pay attention, please, to cash cost of production in Q1 $0.10 /oz, that is why Silver above 14 $/oz is beating swine flu scare even in Mexico. If our long term analyses about the Gold and Silver next move is correct, it could be the last chance to accumulate cheap shares in Mexican Silver plays this Summer.

May 19, 2009

Fortuna Reports Record Revenue of US$ 8.98 Million and a Production Cash Cost of US$ 0.10 /oz of Silver in Q1 2009

May 19, 2009: Fortuna Silver Mines Inc. (TSX.V: FVI / Lima Exchange: FVI) - is pleased to announce that it has filed its financial statements and MD&A for the three months ended March 31, 2009. The full documents are available on SEDAR and have also been posted on the Company's website at http://www.fortunasilver.com/.Change in Reporting CurrencyEffective January 1, 2009, the Company changed its reporting currency to the US dollar. The change in reporting currency is to better reflect the Company's business activities and to improve investors' ability to compare the Company's financial results with other publicly traded businesses in the mining industry.First Quarter 2009 highlights
Historic record sales of $ 8.98 million compared to $ 6.81 million Q1 2008
Operating cash flow before changes in non-cash working capital items of $ 4.23 million compared to $ 2.61 million Q1 2008
Net loss of $ 1.06 million compared to net loss of $ 0.64 million in Q1 2008
Cash position and working capital as at March 31, 2009 were $ 27.02 million and $ 32.59 million respectivelyJorge Ganoza, President, CEO and Director, commented, "The Fortuna team has delivered another quarter of continued achievement with record sales and record silver production. Silver now represents 49% of revenue at a cash cost per oz of $0.10 net of by-product credits. We remain on target to achieve our forecast production of 1.6 million pure silver ounces for 2009. Through continued increments in efficiency, throughput and head grades Fortuna now clearly ranks amongst the lowest cost silver producing companies." Financial ResultsDuring the first quarter of 2009, the Company generated record quarterly revenue of $ 8.98 million compared to $ 6.81 million over the same period in 2008. The volume of concentrate sales during the first quarter of 2009 was 77% more than the same period in 2008. The significant increase in sales is the result of the Company's investment plan over the last two years in mine development, processing plant expansion and infrastructure. Mine operating income in the first quarter of 2009 was $ 3.41 million compared to $ 2.30 million over the same period in 2008. This improvement, in spite of significantly lower metal prices, is a consequence of an increase in throughput, head grades, recoveries, and lower operating costs. Operating income for the first quarter of 2009 was $ 0.08 million after deducting $ 0.35 million of stock-based compensation charges and $ 1.08 million of a write-off of deferred exploration costs. The operating income for our Peruvian subsidiary, operator of the Caylloma mine, was $ 2.42 million.Operating ResultsIn the first quarter of 2009, the Caylloma mine achieved significant increments in metal output with respect to both, the previous quarter and the corresponding quarter in 2008. Silver production was 384,339 ounces; 32% increase over Q4 2008 and 174% increase over Q1 2008. Lead production was 2,645 tonnes; 5% increase over the Q4 2008 and 123% increase over Q1 2008. Zinc production was 3,152 tonnes; 6% increase over Q4 of 2008 and 52% increase over Q1 2008.The Company is for the first time reporting cash cost per ounce of payable silver at Caylloma since the impact of silver in the revenue stream is 49%. The cash cost for Q1 was $0.10, net of by-products lead and zinc.Cash cost per tonne of treated ore for Q1 2009 was $44.37 compared to $49.97 for the corresponding quarter of 2008. The corresponding unit net smelter return (NSR) was $91.00 per tonne.The average throughput rate for Q1 2009 was 1,050 tpd. The expansion project for the processing plant was concluded 15 days ahead of its scheduled start-up and since mid April, the plant is processing ore at a rate of 1,200 tpd. The newly added copper circuit went into production in the last week of April and it is currently undergoing a normal tuning and balancing period. San Jose ProjectThe Company has concluded metallurgical tests for the project with Metcon Research of Tucson, Arizona and is advancing with feasibility level engineering studies for the development of the San Jose deposit. Engineering contracts were awarded in February for mine design, process plant design, tailings dam, water and power.On April 16th, the Mexican federal regulatory agency for electricity accepted the feasibility study for the energy project and granted permission to connect to the national power grid for up to 5 MW of power. The Company also submitted the "Manifiesto de Impacto Ambiental" to the Mexican environmental authorities on April 3rd. Fortuna Silver Mines Inc.Fortuna is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. Our primary assets are the Caylloma Silver Mine in southern Peru and the San Jose Silver-Gold Project in Mexico. The Company is selectively pursuing additional acquisition opportunities. For more information, please visit our website at http://www.fortunasilver.com/."