Baltic Dry Index. 4340 -83
LIR Gold Target by 2019: $3,000.
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"The current political-economic system is simply unsustainable; no economy can afford to pay for four giant zombie financial institutions, two substantial military adventures, a zombie-driven housing market, an exploding health-care bill and Goldman Sachs partners' lifestyle aspirations."
Martin Hutchinson. November 23 2009.
Stay long gold and silver, it's very much later than we thought. Question. How can you tell when a central banker is lying? Well at the Bank of England anyway, their lips move. Below, the BOE finally comes clean about just how bad the UK's banking crisis was last October. "Crisis? What crisis?" we seem to remember was the official line at the time. Safe as houses, was another unfortunate comparison. Nothing to worry about, everything's under control. In time of crisis and in time of what now passes for normality, it's hard to get the truth from our probity challenged central banksters. Below Mr Murdoch's Thunderer, reports on the BOE now feeding out the truth that couldn't be shared with UK taxpayers and voters, nor the hapless shareholders of Lloyds Bank who were brazenly defrauded last year into an ill conceived rescue of HBOS bank. The UK's banks balance sheets weren't worth the paper they were printed on. The City of London had gone bust. Capitalism has now been replaced by banksterism. Somehow, we must end banksterism before we crash into a fate like Argentina's.
"The Governor of the Bank of England is a no good, lying bastard. He can lie out of both sides of his mouth at the same time, and if he ever caught himself telling the truth, he'd lie just to keep his hand in."
With apologies to Harry S. Truman on Richard Nixon.
November 24, 2009
Bank gave RBS and HBOS 'secret' £62bn loan
Royal Bank of Scotland (RBS) and HBOS were secretly kept afloat with £62 billion of emergency Government support at the height of the credit crisis last year, it was revealed today.
The Bank of England kept the massive liquidity injections secret until today, when it judged calm had been restored and there was no longer any need for secrecy.
The undisclosed support began for HBOS on October 1, two weeks after the collapse of America's Lehman Brothers and when financial markets were at their most panicky, and peaked at £25.4 billion on November 13. The money was eventually repaid on January 16.
RBS began tapping the Bank for liquidity on October 7 and at its peak borrowed £36.6 billion. It paid back all the money by December 16.
Both banks eventually provided the Bank with collateral with a value in excess of £100 billion. They were also charged fees by the Bank.
The so-called Emergency Liquidity Assistance was on top of billions of pounds of other support through loans and guarantees and the £37 billion of equity investment pledged to both banks and Lloyds TSB, which later took over HBOS.
The Bank, in evidence to MPs today, said in exceptional circumstances it acted as "lender of last resort" to financial institutions in difficulty. It said it had decided to use its powers to prevent disclosure of the support in its 2009 Annual Report.
"In most cases, confidence can best be sustained if the Bank's support is disclosed only when the conditions that gave rise to potentially systemic disturbance have improved to a point where the disclosure itself should not be a cause of such disturbance."
So who else got hidden money and which UK banks are still on secret life support? And if the whole UK banking system was in effect ruined and a secret rescued ward of the state, why are we allowing any banks operating in London to pay out bankster bonuses, rather than rightful taxes to taxpayers that effected a rescue of the system? And while we are at it, since we are on a fiat currency system, if we can come up instantly with a secret £62 billion for banksters, why can't the same system come up with a mere £12 million for vital cancer drugs in the NHS, blocked by "a NHS death panel" with the Orwellian name NICE?
NICE says Bayer liver cancer drug too costly
LONDON (Reuters) - The health watchdog has blocked a critical liver cancer drug, saying it is too pricey for the state health service, leaving manufacturer Bayer vowing to appeal the decision. Most people who get the aggressive form of cancer are diagnosed too late for surgery to help, meaning that the drug -- Nexavar -- is one of the only options left, and it has been shown to prolong life by almost four months on average.
19 November 2009 00:46 AM
http://news.stv.tv/uk/138325-nice-says-bayer-liver-cancer-drug-too-costly/
Next, the Telegraph reports on S&P confusing themselves with a ratings agency again. S&P thinks that nearly all the world's banks lack insufficient capital to cover gambling exposure. I wonder if it has anything to do with a quadrillion of derivatives gambling exposure rising again. In a zero sum game one side loses out to the other, so banks only need 500 trillion or so of "honest Abe's" to settle up among each other. I know, some of it nets out, and some of it is so bizarre that both parties list it in the books as making a profit, Bernie Madoff was in the junior leagues when it comes to crime.
Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened.
Winston Churchill.
Most global banks are still unsafe, warns S&P
Standard & Poor's has given warning that nearly all of the world's big banks lack sufficient capital to cover trading and investment exposure, risking further downgrades over the next 18 months unless they move swiftly to beef up their defences
By Ambrose Evans-Pritchard Published: 12:02AM GMT 24 Nov 2009
Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P's list of 45 global lenders fails the 8pc safety level under the agency's risk-adjusted capital (RAC) ratio. Most fall woefully short.
The most vulnerable are Mizuho Financial (2.0), Citigroup (2.1), UBS (2.2), Sumitomo Mitsui (3.5), Mitsubishi (4.9), Allied Irish (5.0), DZ Deutsche Zentral (5.3), Danske Bank (5.4), BBVA (5.4), Bank of Ireland (6.2), Bank of America (5.8), Deutsche Bank (6.1), Caja de Ahorros Barcelona (6.2), and UniCredit (6.3).
While some banks may look healthy under normal Tier 1 and leverage targets, critics claim these measures can be highly misleading since they fail to discriminate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.
S&P has shifted to a tougher code. It is less tolerant of hybrid capital – a liability rather than an asset, and no defence in a crunch – and insists that banks must quadruple capital put aside to cover trading desks. Private equity exposure will be treated more harshly.
The Bank for International Settlements unveiled its own version in September. The regulatory framework worldwide is clearly shifting in this direction, a move that will hit some banks harder than others. "We expect banks to continue strengthening capital ratios over the next 18 months to meet more stringent requirements. Failure to achieve this could put renewed pressure on ratings," said Bernard de Longevialle, S&P's credit strategist.
Tougher rules at this juncture may prove "pro-cyclical", if banks respond by cutting loans. This may perpetuate the credit crunch for smaller borrowers unable to tap the bond markets. "There is a risk that the increase in regulatory capital requirements could weigh on banks' ability to finance recovery," said Mr de Longevialle.
The "safest" global bank is HSBC (9.2), followed by Dexia (9.0), ING (8.9) and Nordea (8.8). UK banks fare relatively well: Standard Chartered (8.1) is in the top quintile; Barclays (6.9) is in the middle. The study left out RBS and Lloyds because their status is unclear. Chinese banks – the world's largest – were excluded.
---- Japanese banks score worst because they rely on hybrids and are major players on the stock exchange, buying equities at 12 times leverage. Equity portfolios make up more than 50pc of their capital. This could prove troublesome given Tokyo's bourse has fallen this year, missing out on the global rally.
German banks do poorly because they have large holdings of asset-backed securities (ABS), often toxic. US banks look healthy in terms of leverage, but look less pretty when this is adjusted for risk.
S&P said past focus on leverage alone had been a recipe for trouble. It encouraged banks to opt for dodgy products – treated as if equal to top-notch sovereign debt – and could be circumvented "off-books" in any case. Rules created the illusion of safety.
Since they left out the Chinese banks, Bloomberg was good enough to put them back in the frame. What is it about banksters and fecklessness with other people's money. What happens in the next few months in China's banks, I suspect, will determine if "the next Lehman" crashes out in the far east. Our unstable, fiat currency, gambling bankster world seems to be getting more unstable by the day.
"The international monetary order is more precarious by far today than it was in 1929. Then, gold was international money, incorruptible, unmanageable, and unchangeable. Today, the U.S. dollar serves as the international medium of exchange, managed by Washington politicians and Federal Reserve officials, manipulated from day to day, and serving political goals and ambitions. This difference alone sounds the alarm to all perceptive observers."
Hans F. Sennholz
China Banks Said to Submit Capital Raising Plans
Nov. 24 (Bloomberg) -- China's five largest banks submitted plans to regulators for raising money after unprecedented lending eroded their capital, according to four people with knowledge of the matter.
Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd., Agricultural Bank of China and Bank of Communications Ltd. told the China Banking Regulatory Commission how they can bolster capital ratios after the watchdog evaluated their finances last week, the people said. Lenders were told to estimate potential deficits in 2010 based on their own loan forecasts and capital ratio targets, they said.
Bank shares fell in Hong Kong trading today after Bank of China said it's studying "various options" to replenish capital. The five lenders extended a record 4.7 trillion yuan ($688 billion) of loans in the first nine months, driving China's economic growth to an annual 8.9 percent rate in the third quarter even as rivals worldwide reined in credit.
"With China's pace of credit growth, banks' capital will be drained very quickly and that leaves little room for cushioning if asset quality worsens," said Sheng Nan, a Shanghai-based analyst at UOB-Kayhian Investment Co.
Bank of China shares fell 4 percent in Hong Kong, the biggest drop in two months. Construction Bank slipped 3.4 percent, the steepest decline since May 13. ICBC and Bank of Communications also slipped. Agricultural Bank isn't publicly traded.
Undercapitalized
The fundraising plans submitted by banks are informal and may change, the people said. Spokespeople at China Construction Bank and Bank of Communications declined to comment. Officials at Agricultural Bank and ICBC weren't immediately available.
Lenders from Japan to the U.K. are raising money after $1.72 trillion of writedowns and credit losses prompted calls from regulators for tougher capital requirements. Mitsubishi UFJ Financial Group Inc., Japan's largest bank by market value, said last week it may seek as much as 1 trillion yen ($11.3 billion) selling common stock.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3RpxPCCPFno&pos=1
China Tightens Rules on Transfers to Stop 'Hot Money'
Nov. 25 (Bloomberg) -- China tightened rules on individuals transferring yuan and foreign exchange between bank accounts after speculation the nation's currency will strengthen caused a surge in capital inflows.
An overseas individual or institution is not allowed to send foreign currencies to five or more Chinese individuals to convert it into the yuan on a single day or on consecutive days, the State Administration of Foreign Exchange said in a statement on its Web site today. Individuals in Hong Kong aren't allowed to buy more than 20,000 yuan a day and daily limits also apply in China.
"The main aim of the new rules is to control inflows of hot money," said Zhao Qingming, a senior analyst in Beijing at China Construction Bank Corp., the country's second-largest lender. "Individuals' cross-border transfers are an important channel for hot money to flow into China."
The central bank said this month foreign-exchange policy will take into account global capital flows and changes in major currencies, fueling speculation it will allow the currency to strengthen as the dollar weakens. Zhao estimated a total of more than $200 billion of speculative capital entered China in the past four years.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aql54raktlLM&pos=4
In other business news yesterday, GM's deal to sell Saab blew up, generating new doubts over the whole future of GM Europe. 2010 is shaping up to be a pressure cooker year.
"No pressure, no diamonds."
Thomas Carlyle.
Saab could be near end of road as sale plan fails
November 25, 2009
The future of Saab was in doubt last night after General Motors (GM), its American parent, said that a deal to sell the troubled Swedish carmaker had fallen through.
GM confirmed that the sale of Saab to Koenigsegg, a Swedish manufacturer of sports cars, had been terminated at Koenigsegg's request.
The failure of the talks raises the possibility that GM may decide to scrap Saab, as it did last month when it said that it would close its Saturn brand after failing to find a buyer.
Saab, one of Sweden's best-known brands, employs 3,400 people in the country. About 3,000 people are employed at Saab's 87 UK dealerships and 100 at its British headquarters.
Without the Saab sale, analysts question GM's ability to restructure its Opel and Vauxhall operations in Europe. GM wants to raise €3.3 billion (£2.9 billion) from European governments to help to save Opel and Vauxhall after reversing a decision to sell them to Magna, a Canadian car parts manufacturer, and Sberbank, its Russian partner.
Erich Merkle, an analyst at Autoconomy, said that closing Saab could be the best option for GM: "Turning round Saab would be a Herculean task for anybody — it would take a tremendous amount of time and money."
Fritz Henderson, GM's chief executive, said that he was disappointed with Koenigsegg's decision. GM would now assess the situation and announce the outcome next week.
Of its plans to sell its Hummer, Opel, Saab and Saturn core brands, only the sale of Hummer, to Sichuan Tengzhong Heavy Industrial Machinery, of China, has gone through.
http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article6930443.ece
We end for the day about to turn 60 and notice that most American's are about to take the day off tomorrow in celebration. From tomorrow, I can apply for my free municipal bus pass, that in theory let's me travel from Land's End to Berwick on Tweed free, via connecting municipal busses. Happily I don't live anywhere near Land's End, and my one and only visit to Berwick found the place inhabited by the most chronically obese and unfit subjects in Her Majesty's fair land. For £26 I can also buy a "senior railcard" knocking 33% of the price of first and second class tickets. When purchased in advance via thetrainline.com, it's possible to travel from London to Edinburgh first class for less than £53.
A very happy, enjoyable family day tomorrow, to all celebrating America's Thanksgiving Day. Despite our troubled economy and plague of banksters, we still have so much to be thankful to God for. I wonder what the "giant vampire squids" have for Thanksgiving, or are they all far too busy doing "God's work" to take the day off? The next LIR update is Friday, "black Friday" in US retail slang, the day traditionally US shoppers rush out and max out their credit cards as they shop till they drop, allowing retailers to move into the black for the year. Sadly I have an early morning appointment and will be travelling tomorrow. Now if I can just remember where I parked my "walker," aka Zimmer frame.
++++++
There is the astounding instance of Overend, Gurney, and Co. to the contrary. Ten years ago that house stood next to the Bank of England in the City of London; it was better known abroad than any similar firm known, perhaps, better than any purely English firm. The partners had great estates, which had mostly been made in the business. They still derived an immense income from it. Yet in six years they lost all their own wealth, sold the business to the company, and then lost a large part of the company`s capital. And these losses were made in a manner so reckless and so foolish, that one would think a child who had lent money in the City of London would have lent it better. After this example, we must not confide too surely in long-established credit, or in firmly-rooted traditions of business. We must examine the system on which these great masses of money are manipulated, and assure ourselves that it is safe and right.
Walter Bagehot. Lombard Street. 1873.
At the Comex silver Tuesday, final figures were: Registered 52.71 Moz, Eligible 59.18 Moz, Total 111.89 Moz.
Crooks & Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today the crooks running the Bank of England, who couldn't tell the truth if you put a gun to their head. We have entered a very dangerous world, where nothing can be relied upon and balance sheets might be outright legal lies. Your property is mine, without benefit of compensation, as the hapless deceived Lloyds shareholders have now found out to their cost. Apparently some on the Lloyds board new of the deception but seem to feel that they are above the law. Investing in Britain is now the equivalent of Russian roulette. "Capitalism's broken," wailed disgraced former guru Greenspan, the man more responsible for breaking it than even President Nixon and his blunder into the world of fiat money. Broken and replaced by Kafkaesque economic banksterism, nothing good comes from operating on this system. No wonder "the giant vampire squids" are busy looting the cash, hand over fist, before the whole corrupt system disappears with the next Lehman.
Conceit is God's gift to little men.
Harry Truman.
How the Bank of England made £62bn 'disappear'
By Edmund Conway Last updated: November 24th, 2009
How easy is it to hide £62 billion? That is the question that has been flummoxing the City today. For it transpires that last autumn, to the almost complete ignorance of most of the City (and, I admit, most of the journalists who, like myself, keep a pretty close eye on the UK economy), the Bank of England lent a staggering amount of cash to Royal Bank of Scotland and HBOS.
----- This is an important issue for all of us. For a period of time in late '08 and early '09, British taxpayers' cash was at a significant risk (although the money lent out by the Bank was not backed up by its own debt so this was rather more like quantitative easing than Government debt). But hardly anyone in Government, Parliament, the City or the general public had a clue. For the conspiracy theorists out there this information will prove extremely worrying (or exciting, depending on whether these things make you tick).
But none of this answers the question of how the Bank managed to keep the details a secret. Although those I have spoken to about it today are painfully tight-lipped about the whole thing (as one would expect), I have a few hunches about where they squirrelled away these numbers.
The first thing to remember that in the wake of the Northern Rock fiasco the Government enacted a number of laws which allowed the Bank to withhold certain information about the constitutent parts of its balance sheet if it judged that this would help it improve financial stability. This meant that it could legally be rather more discrete about where in the balance sheet these sums would show up. However, as it pointed out in its Annual Report last year, it is still obliged to disclose the overall picture of its balance sheet, and this would not be complete without including the £61.6bn of cash it lent to these two banks. The money could not simply disappear into a black hole of its own making.The first thing to remember that in the wake of the Northern Rock fiasco the Government enacted a number of laws
The likelihood instead is that it was helped in its effort to disguise the cash by the fact that there was an awful lot else going on with its balance sheet at that particular time. Whereas Northern Rock occurred before the crisis had reached a fever pitch, these loans happened when central banks around the world were doing everything they could to stem the pain in financial markets. Among those measures were special currency swap operations in which the Bank swapped cash with the Federal Reserve and the European Central Bank. These operations helped swell the Bank's balance sheet.
In order to hide the emergency loan, all it had to do was, when printing the details of its balance sheet, to plop the loans in the same category as these currency swaps. Voila, no-one could be sure that all that fizzing in the Bank's accounts wasn't just due to those volatile currency swaps.
A permanent Governor of the Bank of England would be one of the greatest men in England. He would be a little `monarch` in the City; he would be far greater than the "Lord Mayor." He would be the personal embodiment of the Bank of England; he would be constantly clothed with an almost indefinite prestige. Everybody in business would bow down before him and try to stand well with him, for he might in a panic be able to save almost anyone he liked, and to ruin almost anyone he liked. A day might come when his favour might mean prosperity, and his distrust might mean ruin.
Walter Bagehot. Lombard Street. 1873.
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LIR's English Pub of the month.
The Royal Oak
Cues Lane
Bishopstone
Nr Swindon
SN6 8PP
01793 790481
royaloak@helenbrowningorganics.co.uk
[The website says it all. Ed.]
We're thrilled to be in the Good Food Guide (2010) for the first time, with a cooking score of 3/10, which those in the know say is a strong start. Being in the guide means you are rated as in the top 1% of places to eat in the UK. Not bad for a place that had its kitchen condemned the day we walked in at the end of 2006. Have a look at our likely autumn menus, elsewhere on this site. They should give a flavour of what we—principally head chef Liz Franklin, Welsh number 2 Deli Gwynedd- Jones and Irish number 3 Avine Calleley—are planning to serve people over the next two or three months.
http://www.royaloakbishopstone.co.uk/index.phtml
Sunspots – A 22 year colder world? (From 2004?)
Spotless Days Nov 24.
Current Stretch: 2 days
2009 total: 245 days (75%)
Since 2004: 756 days
Typical Solar Min: 485 days
We have passed 1954s 8th place record of 241 spotless days. Next target, 1912s 7th place position of 253 spotless days.
LIR, Nov 25, 2009 projection: 272 spotless days.
New Solar Cycle Prediction
May 29, 2009: An international panel of experts led by NOAA and sponsored by NASA has released a new prediction for the next solar cycle. Solar Cycle 24 will peak, they say, in May 2013 with a below-average number of sunspots.
If our prediction is correct, Solar Cycle 24 will have a peak sunspot number of 90, the lowest of any cycle since 1928 when Solar Cycle 16 peaked at 78," says panel chairman Doug Biesecker of the NOAA Space Weather Prediction Center.
http://science.nasa.gov/headlines/y2009/29may_noaaprediction.htm
US Temperature Highlights - October
-
For the nation as a whole, it was the third coolest October on record. The month was marked by an active weather pattern that reinforced unseasonably cold air behind a series of cold fronts. Temperatures were below normal in eight of the nation's nine climate regions, and of the nine, five were much below normal. Only the Southeast climate region had near normal temperatures for October.
http://www.ncdc.noaa.gov/sotc/?report=national&year=2009&month=10&submitted=Get+Report
All-time October low recorded in Bavaria
http://www.thelocal.de/society/20091020-22693.html
Is the Sun Missing Its Spots?
http://www.nytimes.com/2009/07/21/science/space/21sunspot.html?8dpc
Are Sunspots Different During This Solar Minimum?
-----But something is unusual about the current sunspot cycle. The current solar minimum has been unusually long, and with more than 670 days without sunspots through June 2009, the number of spotless days has not been equaled since 1933.
----During the period from 1645 to 1715, the Sun entered a period of low activity now known as the Maunder Minimum, when through several 11- year periods the Sun displayed few if any sunspots. Models of the Sun's irradiance
suggest that the solar energy input to the Earth decreased during that time and that this change in solar activity could explain the low temperatures recorded in Europe during the Little Ice Age.
----The same data were later published [Penn and Livingston, 2006], and the observations showed that the magnetic field strength in sunspots were decreasing with time, independent of the sunspot cycle. A simple linear extrapolation of those data suggested that sunspots might completely vanish by 2015.These observations caused researchers to wonder whether the characteristics of sunspots are different now than in other solar cycles.
http://www.leif.org/EOS/2009EO300001.pdf
What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.stm
Sunspot cycle 24: Together with sunspot cycle 25, the next two global cooling cycles. The new "Dalton Minimum?" Two years now with low sunspots numbers, and counting. October was the 24th month of yet another low number of 4.6 http://en.wikipedia.org/wiki/Dalton_Minimum
Smoothed sunspot numbers (SSN). 2007, Oct. 0.9. The end of cycle 23.
Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6.
Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml
The count. http://sidc.oma.be/products/ri_hemispheric/
Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf
The "Carrington Event," September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm
Current Space Weather.
What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.stm
This week's featured links: Silver & Gold Miners + Rare Metals.
With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:
Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.
Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp
Semafo TSX: SMF http://www.semafo.com/home_company_intro.php
ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/
US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp
Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/
First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp
New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html
Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp
International Wayside Gold Mines Ltd. TSX.V: WYG.
http://www.wayside-gold.com/s/Home.asp
Shoreham Resources Ltd. TSX-V: SMH
ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp
Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/
Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands.
http://www.lydianinternational.co.uk/
The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China's hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.
Avalon Rare Metals Inc. TSX: AVL. www.avalonraremetals.com
We will be adding more REEs as appropriate.
Warning.
Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven't a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.
The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.
As always if thinking about making an investment, it's important to do one's own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a "V" shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.
Graeme Irvine
London Irvine Report: www.londonirvinereport.com/
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