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XMFSinchiruna (27.71)

Keeping Up With News The Flow

Recs

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March 15, 2011 – Comments (22) | RELATED TICKERS: CEF , AUY , GPL

I am deeply saddened that the distinct lack of wisdom that guides most of our species' misadventures upon meddling with forces we are unfit to wield. As someone who has intimate knowledge of human impacts of radiation exposure, having worked my way through a massive archive of declassified documents relating to the issue, I am also deeply concerned for anyone downwind of these reactors at distances far greater than the 30km zone delimited by the government thus far. This remains a highly dynamic situation that is definitely not under any semblance of control, despite the heroic sacrifice of the 50 workers remaining on-site at enormous personal risk. 

Wikipedia has a pretty good write-up of the Chernobyl incident in case anyone would like to refresh their memories:

http://en.wikipedia.org/wiki/Chernobyl_disaster

It is necessary to know whether a previous video of an outflow of visible smoke is something that continues to rise from the site. The more airborn contamination we get (and the higher that material is expelled into the air column), the more likely we are to see material move over longer distances outside of the region surrounding Japan.

.....

Turning to financial matters, Japan's market has shed an incredible $620 billion in 2 days, and any further deterioration in the Fukushima situation could conceivably extend the decline.

As concern about the crippling economic impact of the nuclear and earthquake disasters mounted, Japan's Nikkei index fell as much as 14 percent before ending down 10.6 percent, compounding a slide of 6.2 percent the day before. The two-day fall has wiped some $620 billion off the market.

The Bank of Japan has responded with a $245 billion injection of Yen into money markets:

The move was designed to ensure that banks have enough liquidity to meet a surge in demand from companies and households seeking to raise funds.

.....

A likely combination of the carry trade unwind, a sudden "sell everything" mentality gripping world markets, and a cunningly timed short attack form the bullion banks (the set-up for which in silver was potentially observed by Ted Butler here) have sparked an exodus from silver and gold. Mining equities will open today with a nasty decline, and I personally intend to begin deploying my sidelined cash gradually into the resulting weakness. I call the short attack cunningly timed not only because it takes advantage of the events in Japan in characteristically unscrupulous fashion, but also because it coincides with the mid-March timeframe that veteran pom investors have yet to forget in relation to the 2008 crash and other significant counter-trend pullbacks. Because of the extreme state of scarcity of available physical silver supply, however, I believe this dip will prove fairly short-lived and ultimate another great6 opportunity for investors to initiate or press their long-term long positions in gold and silver. Once the shaken-out pm investors figure out that this hit to Japan's economy carries ominous ramifications for the mythical U.S. recovery, and relate that realization the resulting inevitability of QE3, I expect both metals to resume their ascents in short order. Depending upon how events play out here, though, the pulback could potentially be surprisingly deep despite what I suspect will be an abbreviated timeframe of the setback. This notion fits within Jim Sinclair's forecast for increasing volaitility moving forward ... something I have also been caling for all along.

.....

Ron Paul is preparing to do his part to help educate the public about the misleading nature of CPI data:

“It is unconscionable that published government statistics mislead Americans regarding the true rate of price inflation, which is much higher than commonly-reported CPI numbers,” Paul stated. “It is also unconscionable that Federal Reserve Bank officials continue to deny the effects of their monetary expansion on consumer prices.  Inflation, properly understood, is a monetary phenomenon.  The price inflation Americans suffer today is largely the direct result of relentless monetary expansion by the Federal Reserve over the past decade.  Our witnesses will explore how current monetary policy, including QE2, directly impacts the standard of living of Americans in ways that are not reflected in official government data.”

Congressman Walter Jones, vice chairman of the subcommittee, stated, “The Fed has attempted to convince the public that its money printing campaign is necessary to stimulate America’s economic recovery.  Instead of recovery, the real effect of the Fed’s money printing has been monetization of America’s exploding fiscal deficits, devaluation of the dollar, and creation of inflation in asset prices across the board.  As a result, working people in places like Eastern North Carolina are being squeezed at the gas pump and the grocery store as they struggle to make ends meet in a world in which their salaries have no chance of keeping up with Mr. Bernanke’s printing presses.”

.....

Also worthy of close tracking for all investors, despite the extent to which these events have been stricken from the headlines with all eyes focused upon Japan, are the highly dynamic events underway both in Libya and Bahrain. Many onlookers are terming the incursion of Saudi and UAE troops into Bahrain as an invasion. Semantics aside, it is a development that presents a risk of further escalation of unrest/conflict in the region. As with Japan's nuclear disaster, there is something strange about mainstream coverage of these events lately. Repeatedly looped video of supposed civilian insurgents undergoing some quirky-looking training to operate high-end 50-calibre weaponry (and presumably permitting filming by foreign journalists), or congregating at seemingly non-strategic locations out in the middle of nowhere where they are sitting ducks for attacks from the air, just don't feel right to me. I would love to know when/why CNN and other news outlets became so comfortable looping video as backdrop to on-air babble without providing any helpful context whatsoever for the images (where they are filmed, by whom, when, and explanation of that which is depicted, for i.e.). I'm not offering any conclusions, but rather merely observations.

.....

More later ... I have to get writing.  If you agree that gold and silver are the best places to be deploying cash into this selloff, let me know what stocks you're stocking up on.

Our collective best wishes for the embattled people of northern Japan, and our collective appreciation for the heroic sacrifice of those remaining plant workers.

Fool on!

22 Comments – Post Your Own

#1) On March 15, 2011 at 9:43 AM, XMFSinchiruna (27.71) wrote:

Can you tell I started this post at 6am? :) That's "Keeping Up With the News Flow"!

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#2) On March 15, 2011 at 10:01 AM, Horiemon (< 20) wrote:

Yamana Gold

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#3) On March 15, 2011 at 10:02 AM, silverminer (31.04) wrote:

Horiemon

:) nice price

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#4) On March 15, 2011 at 10:18 AM, kdakota630 (29.50) wrote:

Can you tell I started this post at 6am? :) That's "Keeping Up With the News Flow"!

I must be tired too because I didn't notice at all.

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#5) On March 15, 2011 at 10:43 AM, jesusfreakinco (28.80) wrote:

Chris,

Buying back some of my positions this morning.  The pullback it too tempting right now.  Will keep an eye on the overall market because I agree a broader liquidation could occur pulling PMs lower for a short time.

JFC

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#6) On March 15, 2011 at 11:03 AM, goldminingXpert (29.43) wrote:

I, also being tired, read it as Keeping Up With News: The Flow and figured you were intentionally going with an unusual structure for effect.

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#7) On March 15, 2011 at 12:12 PM, Jbay76 (< 20) wrote:

Hey Chris,

I did tkae advantage of this unfortunate incident, which rode the back fo the Libya uprising to double down on RBY and AXU, start a nice position in both GRS and CPFX , and increased my GPL position by 5 fold, all within 3 accounts.  I closed a position in NLY to help with this spending spree.

Unfortunately for Japan, but fortunately for us, the snow/rain precipitation they are recieving should be sufficient enough to ensure what radioactive gases were released into the atmosphere come back down to land, thereby minimizing dispersal to a degree.

Mikecart1 had a good blog about the nuclear reactor issues worth reading.  A japanese researcher I work with mentioned that it is funny that Japan has more nuclear reactors than the US, but in the end it was more efficient, cheaper and cleaner than their usage of coal. Who would have known?

Here's to hoping things will get better instead of worse for all involved

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#8) On March 15, 2011 at 12:31 PM, tdonb (29.54) wrote:

I am very interested in Sandstorm Gold.

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#9) On March 15, 2011 at 12:59 PM, Gonzhouse (77.39) wrote:

The one metal going up today is palladium (PALL, SWC) on reports that Russia is running out of their stockpile (as evidenced by the substantially decreased deliveries to the palladium market in Switzerland).  If palladium is going up on a day like today, what do you think it will do when markets return to normal?

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#10) On March 15, 2011 at 1:09 PM, darroj (32.64) wrote:

doubled down on GRS

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#11) On March 15, 2011 at 1:15 PM, leohaas (32.11) wrote:

Everything is down today. Isn't it possible that this is ALL due to the earthquake, tsunami, and reactor problems in Japan and the unrest in the Middle East? Wouldn't this be a normal market reaction to such immense problems affecting the thrid-largest economy in the world and the region that produces a significant part of the world's oil?

I mean, regardless of an alledged conspiracy in silver or what Ron Paul thinks of QE2 and CPI?

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#12) On March 15, 2011 at 3:51 PM, Jbay76 (< 20) wrote:

I think that as well, Leohass.  In fact, the market turned around when news that the Suadi's were not going to the streets to protest.  Once the news of the earthquake and tsunami came, there went the stock market.  I think once things settle down, the market, PM and their miners in particular, will rebound fast.

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#13) On March 15, 2011 at 4:22 PM, Rags2Riches08 (< 20) wrote:

Sinch,

With Nomnf dropping to around 10 cents,I was thinking aobut picking some shares up.  What do you think?  

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#14) On March 15, 2011 at 6:07 PM, fewl10 (< 20) wrote:

I finally have some positions in silver going so I can stop being jealous of everyone. Decided to bet on GPL.

1st position was at 4.09 a couple days back.

2nd position today (bigger bet) at 3.63.

My recommendation for those wanting to get in is to put a stake in the ground (mine is at 4.09) and then increase your positions at prices ONLY lower than your first.  So if it goes to the low 3's I will add a third and final stake. 

I think GPL will hit 6 or 7 eventually.  I agree that silver will be the home run this decade, whereas gold was the home run last decade.

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#15) On March 15, 2011 at 6:07 PM, fewl10 (< 20) wrote:

I finally have some positions in silver going so I can stop being jealous of everyone. Decided to bet on GPL.

1st position was at 4.09 a couple days back.

2nd position today (bigger bet) at 3.63.

My recommendation for those wanting to get in is to put a stake in the ground (mine is at 4.09) and then increase your positions at prices ONLY lower than your first.  So if it goes to the low 3's I will add a third and final stake. 

I think GPL will hit 6 or 7 eventually.  I agree that silver will be the home run this decade, whereas gold was the home run last decade.

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#16) On March 15, 2011 at 6:31 PM, Valyooo (99.36) wrote:

Excellent post.  I bought GPL back at 3.74 this morning...sold it last week at 4.30.

I am still a little down on SIL, but whatever.

Any ideas on picking up some URA, or is that not your thing?  

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#17) On March 15, 2011 at 7:00 PM, 100ozRound (29.44) wrote:

Valyooo - I'm waiting for the dust to settle in the uranium sector.  I'm looking at Denison DNN, Strathmore STHJF.PK, and Uranium Resources URRE.  I've had my eye on them for a while but now they're super tasty.

 

Oh yeah and Cameco is nice too but didn't get hit near as hard as the others!

 

Wait for it though

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#18) On March 15, 2011 at 7:28 PM, silverminer (31.04) wrote:

Valyooo

No nukes!

fewl10

Excellent job, and great entry strategy! I shaved a little off the top at $4.90 and $4.60over the past couple of weeks (hence why I wasn't able to mention the stock for a few days there). Because that one stock made up 14% of my portfolio of 80+ pm equities, it was time to reduce my weighting a bit before it overtook my #1 holding. I am using the proceeds to press micro-cap and junior positions in gold, silver, base metals, and met coal. I made 9 small purchases today, and still hold cash reserves near 10%. 

I consider your target price for GPL quite conservative. I plan to hold for double digits.

Rags2Riches08

Suitable only for highly speculative capital. Please be sure to find my summary of my discussion with the CEO following their initial resource estimate. I do feel that the market has overreacted to the disappointment.

leohaas

Sure, it's possible, and so we're clear that Ron Paul bit was not offered as an explanation for price action at all ... just posting relevant news. However, since silver is continuing to see concerted accumulation of commercial net short positions even in the wake of the Presidents Day short squeeze, the degree of concentration of trading positions by the handful of bullion banks makes manipulative foul play a very likely contributor to sell-offs as they pull out the stops in a fruitless effort to prevent the big run to $50 silver and beyond. Manipulation in the silver market is fact. That it occured today is merely informed speculation, but that it occurs is has been established beyond a reasonable doubt.The unbacked paper market is an instrument of that manipulation, and that too has been fully documented for the house of cards that it is.

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#19) On March 15, 2011 at 11:12 PM, catoismymotor (39.02) wrote:

I own SLW, ISVLF.PK, GRS and NXG.

I bought them thinking that the pre 03/10/11 world was uncertain enough to drive them up and keep them there. Add in the horror that has confronted Japan and the time it will take the third largest economy to recover I can't help but think some of those billions of dollars that have fled the markets over the last 72 hours will find their way into PMs.

My thoughts and prayers go out to the land of the rising sun. Japan will recover. Japan will thrive.

 

 

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#20) On March 16, 2011 at 1:44 AM, magnetpal (< 20) wrote:

I am planning to add more copper fox. Seems lots of insiders buying these down days where their resource estimate release is due very soon. Till now, they released only for 1500 acres of 51000 acres. They are going to do a full 51k estimate it seems. By judging the insiders action, it should be a very good news. And 1.3 is a great price anyway:).

I will be also adding tinka resources. It is holding very strong above 0.40 cents even in this carnage. Seems there was a large silver producer is trying to do a JV with tinka. Should be lots of news in summer.

 

 

 

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#21) On March 16, 2011 at 5:19 PM, richthegeek (< 20) wrote:

I am much more concerned about the ripples through the world economy than I am about radiation. The reactor designs are far advanced from that of the Cherynobyl reactor as they have much better containment systems.

The fallout from the disruption of electronic components manufacturing is much harder to contain.

"Keep in mind that Renesas is the world's leading microcontroller manufacturer. It has 3 plants near the epicenter and Freescale has one as well. An MCU shortage would be very important since there seems to be one or more MCUs in everything today. The typical automobile these days contains something like 30 microcontrollers."

Here's the full article:

http://electronicdesign.com/article/digital/Earthquake-Impacts-Semiconductor-Industry.aspx

 

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#22) On April 03, 2011 at 10:24 PM, skypilot2005 (< 20) wrote:

On March 15, 2011 at 6:31 PM, Valyooo (98.51) wrote:

Excellent post.  I bought GPL back at 3.74 this morning...sold it last week at 4.30.

I am still a little down on SIL, but whatever.

Any ideas on picking up some URA, or is that not your thing?

On March 15, 2011 at 7:00 PM, 100ozRound (99.97) wrote:

Valyooo - I'm waiting for the dust to settle in the uranium sector.  I'm looking at Denison DNN, Strathmore STHJF.PK, and Uranium Resources URRE.  I've had my eye on them for a while but now they're super tasty.

 

Oh yeah and Cameco is nice too but didn't get hit near as hard as the others!

 

Wait for it though

 *****

SkyPilot2005:

I ‘ve completed some D. D. today on Energy Fuels in the uranium space.  Looks good enough that I am going to purchase some.  EFRFF.PK or EFRFF depending on your broker.   http://www.energyfuels.com/

Energy Fuels Inc. is a uranium and vanadium mineral development company actively rehabilitating and developing formerly producing mines. With more than 38,000 acres of highly prospective uranium and vanadium property located in the states of Colorado, Utah, Arizona, Wyoming, and New Mexico, and exploration properties in Saskatchewan’s Athabasca Basin totaling approximately 32,000 additional acres, the Company has a full pipeline of additional development prospects. Energy Fuels, through its wholly-owned Colorado subsidiary, Energy Fuels Resources Corporation and its British Columbia subsidiary, Magnum Uranium Corp., has assembled this property portfolio along with a first class management team, including highly skilled technical mining and milling professionals based in Lakewood and Naturita, Colorado and Kanab, Utah.

Sorry if, I took up too much space.  :)

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