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To: The1Stockman who wrote (4104)	3/3/2013 7:52:40 AM
From: lorne	1 Recommendation Respond to of 14245

Why, If You Think About It, We’re All Screwed March 2, 2013 kingworldnews.com Today Michael Pento writes for King World News to explain exactly why “... the unquestionable winner of all these currency wars will be precious metals and energy related investments.” Below is Pento’s tremendous piece: Today Michael Pento writes for King World News to explain exactly why “... the unquestionable winner of all these currency wars will be precious metals and energy related investments.” Below is Pento’s tremendous piece: “It is sad to say there are just two reasons why the U.S. is not yet a banana republic. The first reason is that the US dollar has not yet lost its world’s reserve currency status, which is helping to keep interest rates at record low levels. If the dollar, yen and euro were not involved in a currency war, the dollar’s intrinsic decline would become much more evident, causing domestic inflation to soar, and our bond market to immediately collapse. However, the perpetual erosion of fiat currencies will eventually cause investors to eschew the sovereign debt issued by the over-indebted nations of America, Japan and Europe—even if the dollar’s decline does not manifest itself against the euro and the yen.... “The other reason why we have not been declared a banana republic is because America is not located between the Tropics of Cancer and Capricorn. The Definition of a banana republic is a nation that suffers from chronic inflation, high unemployment and low growth; primarily due to massive government debt and deficits that are purchased by its central bank. T here is no doubt that the U.S. has suffered from structurally high unemployment, stubbornly high aggregate price levels, and low growth for the past five years, which is the direct result of our debt-saturated economy. With all of the hype over Sequestration, investors might believe the U.S. was about to balance its budget overnight. However, the sad truth is that the budget for fiscal 2013 will still be over $3.8 trillion—which is greater than the year prior. Therefore, the 2% cut in proposed budget expenditures can only be considered a real cut in Washington, D.C. So let’s just assume there exists a country located 15 degrees north of the equator that had amassed $7.5 trillion of new debt in the last 5 years alone. This nation also has nearly $17 trillion in issued debt outstanding, a debt to GDP ratio above 106%, and has clearly shown it is incapable of preventing that ratio from rising. The central bank of this tropical land artificially pegged interest rates at 0% for over 4 years, has pledged to keep them there for at least three more years, owns $1.8 trillion of government debt and has pledged to buy $1 trillion more during 2013. Let’s not forget that $1 trillion worth of central bank buying just happens to coincide perfectly with the projected annual deficits of $1 trillion for the foreseeable future. What adjective would you use to describe this country? Of course, any objective observer would designate it a bona fide banana republic! This is the reality of the economic backdrop of the U.S. But, as mentioned previously, the legacy effects of having the world’s reserve currency postpones the most pernicious effects of such economic fundamentals that exist in our country. Nevertheless, even though the Japanese and European economies also suffer from debt and stagflation, this isn’t enough to purge the U.S. economy from its insolvency; nor will it save our bond market from that inevitable historic rise in yields. The problem is now even the mere normalization of bond yields would send interest payments on our unprecedented amount of debt soaring. This could force the Fed to step up its dollar creation far in excess of what the BOJ or ECB would dare to create in order to stem that rise; and this could be the catalyst to send the dollar and bond market crashing even further. While some love to speak about the return of ‘King Dollar,’ the truth is any nation that seeks to remain viable through the life support provided by its central bank purchases of sovereign debt, should be designated a banana republic--regardless of its geographic location. That is why the U.S., Japan, and the eurozone are headed down the road to serfdom, or fruitdom if you will. This is also why the unquestionable winner of all these currency wars will be precious metals and energy related investments.”

To: The1Stockman who wrote (4104)	3/3/2013 10:01:11 AM
From: lorne	Read Replies (1) \| Respond to of 14245

Jammes...Why would China share any knowledge about what they are doing with their currency or gold with the little people? I mean China has almost as much control over their media as hussein obama..and his keepers... has over America's media. So these powers want us little people to have this information...Why?

To: The1Stockman who wrote (4104)	3/3/2013 7:34:20 PM
From: lorne	Read Replies (2) \| Respond to of 14245

The meltdown of the jr. precious metal mkt. Small stocks hit 2008 lows as junior golds collapse to $29 per ounce / algorithmic trading is fueling TSX Venture destruction Pinetree Capital (TSX: T.PNP, Stock Forum; 68 cents) I have used for years as a benchmark of investor sentiment. They hold a large portfolio of micro and small cap public companies across various sectors worth almost $200 million. Approximately 70% is weighted toward base and precious metals and 15% uranium and other specialty metals and minerals. This five-year chart on Pinetree sums it up very well – we are currently back to the devastating lows hit in Q4/08 following the global economic collapse. At that point, the level of pessimism hit an all-time low and the discussions centered on the 1930’s depression. The difference today, the Dow is near a five-year high and it is only the small, higher risk companies that are being subjected to these incredibly low valuation levels. Junior golds collapse to $29 per gold ounce To back this “post economic collapse” valuation scenario, we can also take a look at the junior gold stocks. I track 50 with a minimum one million ounces (43-101 compliant) and have been doing so since I noticed cracks in the foundation March 2011. I use this to try and benchmark fair value for the sector overall, but also when researching individual companies and trying to determine their growth potential and risks. View my comments below on Victoria Gold and you will understand why this is important. As the following chart will show, we hit what appeared to be a low in June 2012. At that time, we were all devastated that valuations could have fallen to these levels. That basket of junior golds hit $29 per ounce this past week! Algorithmic traders helping destroy our market Defined: en.wikipedia.org In “normal” times issuing news was a positive event that both companies and shareholders looked forward to. Now it is a liquidity event. If news is moderate to good – it creates enough buying for shareholders to liquidate. If it is good enough to generate a substantial amount of buying – the algorithmic traders identify the liquidity, jump on it like maggots – and butcher it for a penny or two. Then they move on after a couple days to the next play and leave the company in the dust. The Canadian junior markets are too small for these algorithmic traders. This works fine on larger companies or exchanges, but it is destroying our small Canadian market and the Venture Exchange. No doubt they introduced it (and continue to allow it) because of the fees the exchange generates. But when we have a weak investment environment to begin with (for micro and small caps in Canada), we will be left with a barren wasteland within the next couple years. More than just financial destruction If something isn’t done in 2013 to address this, we will have a very serious problem and the reputation (that took the past decade to repair) of Canada being the best place on the planet to raise exploration capital – will be wiped out. Right now more than 500 small companies on the TSX Venture are at risk of disappearing. They will soon run out of money with few options to tap into capital. To an extent you can view this as survival of the fittest. However, at the same time, this has destroyed the speculative portfolios of tens of thousands of investors in the TSX and TSX Venture who have traded (quite successfully) these markets for decades. Now in a matter of two years we are at risk of losing those investors (speculators). Many will never return because they are in, or approaching, retirement age. Others will slowly dip their toe back into the market, but only after a period of years. Cash- rich companies are also struggling And the situation isn’t much better for the companies with cash. Through my Virtual Vulture Fund we track 80 TSX and TSX.V listed companies with a minimum of $10 million and a maximum of $190 million. They are not fairing any better. Most trade at or well below cash value and many are just sitting on their cash doing nothing with it – creating long term retirement projects for senior management and the board (Phoscan at 27 cents with $60 million is one good example). Others like Victoria Gold (TSX: V.VIT, Stock Forum; 19 cents) have more than $30 million in the bank and six million gold ounces in the Yukon - that appears economic. What is the market currently valuing that gold at? An incredibly low $5 per gold ounce. And this is one of the most stable regions of the world. On February 19, Victoria Gold announced critical environmental approval that took two years to obtain. This should have produced some decent gains considering the low valuation of the gold and the fact they traded rock bottom on their chart. Instead, the stock cycled 3.6 million shares and went nowhere. Thanks primarily to short term traders and in particular, the algorithmic traders who had their computer programs skim off half a penny or so every few seconds of decent activity. What should have been market moving news – was an event that did nothing to change the valuation of the company. And this is supposed to be an “Efficient” Market? It isn’t even close. In fact – this is a huge mess for small Canadian companies and retail investors. If the stock exchange, regulators, and brokerage firms don’t put their heads together in 2013 to arrive at a solution, we are going to see billions of dollars in speculative capital leave this venture market permanently. And with so many investors approaching retirement age, now is not the time for them to bury their head in the sand and think it will fix itself. I am not convinced it will this time.