Chart for the Day -- Gold

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Monday Is Chart Day

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News You Can Use for Monday

News from the US …

Cheapest Stocks in 16 Years Entice Investors investors are preparing to snap up shares of telephone, health-care and computer companies after last week's $2.1 trillion global stock market rout left U.S. equities the cheapest in 16 years.

Stock Bulls Grow More Bullish as Global Equity Markets Lose $2.1 Trillion The biggest losses in equity and credit markets in five years are making the U.S. stock bulls more bullish.

Fed's Poole Says Inflation Is Slowing `a Bit,' Subprime Damage Contained Federal Reserve Bank of St. Louis President William Poole said inflation is ``moderating just a bit'' and suggested the central bank can afford to wait before lowering interest rates.

TIPS Prove Poor Tip for Bond Traders Anticipating Inflation's Acceleration Treasury investors say inflation is abating, even if the oil bulls are right and crude heads to $100 a barrel.

News from the rest of the world …

China Orders Banks to Raise Reserves a Sixth Time to Cool Economic Growth China ordered banks to set aside larger reserves for the sixth time this year to curb lending and investment after the economy grew at the fastest pace since 1994.

Corporate Bond Risk Surges as Germany's IKB Reports Subprime-Loan Losses The risk of owning European corporate bonds soared to the highest in at least three years after Germany's IKB Deutsche Industriebank AG reported losses on U.S. subprime mortgages, credit-default swap prices show.

European July Retail Sales Fall Most in Three Years, Bloomberg PMI Shows European retail sales fell the most in three years in July, adding to evidence that economic growth in the 13-nation euro region may have peaked, the Bloomberg purchasing managers index showed.

Kuwait Says Currency Peg Gives It `Flexibility' in Setting Exchange Rate Kuwait's decision to peg the dinar to a basket of currencies gives it flexibility in setting its exchange rate, Kuwait News Agency reported, citing central bank governor Sheikh Salem Abdul Aziz al-Sabah.

Paladin cuts output forecasts at Namibian uranium mine. ustralia-based exploration and development company Paladin Resources now expects to produce 2,2-million pounds of uranium from its Langer Heinrich mine, in Namibia, during the 2007/8 financial year, down from a previous forecast of 2,6-million pounds.

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Saturday Pants-Off, Dance Off

I'm working on my next big report, so little time to post. Here are two videos.\
First, a little music to make you dance, dance, dance!

A Latin (female) friend of mine once told me: "You know, Shakira isn't really a good dancer." To which I replied: "Who cares?" LOL!

Second video: "I got a fever. And the only prescription for it is ... more cowbell."

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Will The S&P Test Support

Looking at this chart from ChartoftheDay.com, it looks like the answer is "yes," and the test will likely come on Monday.What happens then is the $64,000 question.

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Get Your Weekend On!

Well, considering the market's shellacking -- Bloomberg says this was the worst week for the Dow since March 2003 (-4.2%) and the worst week for the S&P 500 (-4.9%) since September 2002 -- I'm ready for the weekend. How about you?

Here are two music videos for you. First, one for all my trader friends ...


Now, go have some fun ...

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Talkin' About the Markets With Phil

At HoweStreet.com, you can listen to me prattle on about what is weighing on the market, and what the bears are ignoring right now: http://tinyurl.com/23xvzg

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Horrible Day for the Markets

Most markets that is -- some commodities, including oil, had a very good day. Here's one reason why ...

Mexican Company Predicts End of Oil
Mexico, Jul 27 (Prensa Latina) Petroleos Mexicanos (PEMEX) announced that oil reserves may run out in seven years.
"Supplies of this economically exploitable resource are running out," informed a report sent by the state owned company to the United States stock market.

Check out my new gold and energy blog at MoneyAndMarkets.com

My latest interview on Market Matters Radio

In which Tom and I talk about uranium, gold, and how the subprime meltdown is squeezing small-cap natural resource stocks ...

http://www.marketmattersradio.com/mp3player.php?name=web_25072007_sean_brodrick.mp3

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News You Can Use for Thursday

XX I have to admit this is some pretty bearish stuff ...

Stocks Tumble Worldwide as Credit Concerns Prompt Investors to Avoid Risk Stocks fell around the world and U.S. Treasuries rallied on concern higher borrowing costs will slow takeovers, spur debt defaults and curb earnings, prompting investors to flee riskier assets.

U.S. New-Home Sales Slide; Durable Goods Orders Drop, Signaling Slowdown The U.S. housing recession deepened last month and orders for durable goods unexpectedly fell, suggesting the economy will slow in the second half of the year.

Absolute Capital Suspends Withdrawals from Hedge Funds After CDO Losses Absolute Capital Group Ltd., an Australian hedge fund that invests in collateralized debt obligations, suspended withdrawals from two of its funds after forecasting losses amid a rout in U.S. subprime mortgages.

XX That is, until you get to natural resources ...

Australia Will Consider Selling Uranium to India, Industry Minister Says Australia is considering ending a ban on uranium shipments to India once the South Asian nation negotiates an accord with the U.S. to help prevent proliferation of atomic weapons, a government minister said.

Gold Climbs in London on Speculation Dollar Will Decline; Silver Advances Gold snapped three consecutive days of declines in London on speculation a drop in the value of the dollar will increase demand for the precious metal as an alternative investment. Silver also rose.

Nymex Gas Rises as Traders Seek to Lock in Prices for the Hurricane Season Natural gas futures in New York advanced as traders bought contracts to lock in lower prices before the arrival of the most intense two months of the hurricane season.

So why are natural resources stocks being punished, too? A) Hedge funds are raising cash to meet withdrawls and B) investors are starting to fear a recession, so they're taking money out of stocks and putting it into bonds. Both are short-term. We may see some great stocks on sale very soon.

Meanwhile, the spot price of uranium is dropping, down to $120 per pound, while the long-term contract price stays steady at $95 per pound. We might expect the spot price to pull back to the long-term price before looking for a floor.

Check out my new gold and energy blog at MoneyAndMarkets.com

Catch the Mistake in Today's MoneyandMarkets.com

I've used a site called InvestorGuide for information on mutual funds in the past, but apparently I have to stop trusting it. It said the name of a Fidelity Fund, FDFAX was "Fidelity Food and Agriculture."

http://www.investorguide.com/mutual-fund.cgi?symbol=FDFAX

But the name changed a year ago to Fidelity Select Consumer Staples.

https://fastquote.fidelity.com/webxpress/popup_frameset.phtml?SID_VALUE_ID=fdfax

Same fund, different name. Blink and you'll miss it, because we're fixing the name on today's MoneyandMarkets.com: http://tinyurl.com/29r398

Check out my new gold and energy blog at MoneyAndMarkets.com

Will The Subprime Meltdown Affect Commodities?

I think gold and oil are looking great lately. The pullbacks we see are a normal and necessary part of any bull market, and they should be bought.

Meanwhile, the subprime market is in full meltdown. Countrywide Financial is the largest US mortgage underwriter, and its earnings just imploded. On the earnings call, deeply tanned (have you seen this guy on CNBC?) CEO Angelo Mozilo said: "The company is seeing home price depreciation at levels not seen since the Great Depression"

So how does this affect natural resources? Well, this adds to the credit crunch, which makes it more expensive to borrow money. This in, turn, makes it more expensive for the kind of small-cap natural resources stocks I recommend to expand their businesses. It also has the potential to slow down the merger mania that is sending some great little stocks popping higher.

I'll keep an eye on the situation, and adjust our investment profile if necessary. Just remember, my outlook is longer-term, and longer-term, things look great for natural resources.

Check out my new gold and energy blog at MoneyAndMarkets.com

Monday Is Chart Day

Three charts you may find interesting ...

Check out my new gold and energy blog at MoneyAndMarkets.com

News You Can Use for Monday

Here are some stories of interest ...

China's Exported Inflation May Signal Interest-Rate Pressures Around Globe The rising cost of goods the U.S. imports from China may be an early warning signal that central bankers from the U.K. to India are about to pay a price for a cause they've championed: globalization.

Crude Oil Falls a Second Day After Reuters Reports OPEC May Raise Output Crude oil fell after Reuters reported the Organization of Petroleum Exporting Countries was concerned about high oil prices and their impact on the world economy.

Gold Falls in London as Dollar's Drop Against Euro Stalls; Silver Climbs Gold fell in London as the dollar's decline against the euro stalled, eroding the appeal of the precious metal as an alternative investment. Silver advanced.

Dollar Rebounds Against Euro, Yen as Technical Chart Shows Gains Too Fast The dollar rebounded from a record low against the euro as a technical chart some investors use to predict currency movements suggested its decline was too rapid.

Check out my new gold and energy blog at MoneyAndMarkets.com

China, Australia, Uranium News

China Increases Interest Rates After Fastest Economic Growth in 12 Years China raised interest rates for the third time since March to cool the fastest pace of economic growth in 12 years and restrain inflation

China Says Illegal Fish Farms Responsible for Tainted Seafood Sold to U.S. China's government said unregistered fish farms were responsible for producing the seafood that was found by the U.S. Food & Drug Administration to contain banned chemical substances.

S&P/ASX 200 Rises to Record High, Led by BHP, Santos on Higher Metals, Oil Australian stocks rose, pushing the S&P/ASX 200 Index to a record. BHP Billiton Ltd. and Santos Ltd. led gains as metals prices rose the most in almost six weeks and oil traded at its highest in more than 11 months.

Tuareg Rebels on Brink of Shutting Down Niger's Uranium Mining On Wednesday, the rebel blog claimed a senior Niger officer had joined the rebels, bringing with him 'tens of soldiers and a score of 4x4 vehicles.' One report stated the rebel group's numbers had 'swelled to nearly 2,000.' More than 8,500 former Tuareg rebels have been trained in army school or given civil servant jobs – after the Tuareg uprising in the 1990s.

XX This last one is no surprise to readers who received the latest update on "Small Uranium Wonders."

Check out my new gold and energy blog at MoneyAndMarkets.com

Canadian Gold Update

Here's the latest on Yamana (which is in the Red-Hot Canadian Small-Caps portfolio) ...

Yamana Gold files formal $3.06b bid for Meridian Gold


We knew this was coming. Let's see how Meridian shareholders respond (Meridian's board is against the takeover).

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News You Can Use

China Economy Expands 11.9 Percent in Second Quarter, Fastest in 12 Years China's economy grew at the fastest pace in 12 years in the second quarter and inflation surged, prompting speculation the government will raise interest rates and push the currency higher to cool growth.

Australian Dollar Trades Above 88 U.S. Cents for First Time Since 1989 Australia's dollar traded near an 18-year high versus the U.S. currency and the strongest in 16 years against the yen on demand for the higher yields offered by the nation's financial assets.

Pure Trading Exchange to Start Next Month to Compete With Toronto Exchange Canadian Trading and Quotation System Inc. may start its new electronic stock market in August, after nine months of delays, to compete with the Toronto Stock Exchange.

Husky Says Ohio Refinery Reduces Output by 75 Percent After Morning Fire Husky Energy Inc., the Canadian oil company controlled by Hong Kong billionaire Li Ka-shing, said a fire early this morning reduced production by 75 percent at its newly acquired refinery in Lima, Ohio.

Mexico Guerrilla Group Says Pemex Pipeline Bombings Were `In Self-Defense' A Mexican guerrilla group that claimed responsibility for bomb attacks on natural gas pipelines owned by Mexico's state oil company this month said it acted ``in self defense'' in a new statement.

Nymex Gas Rises After Report of Smaller-Than-Expected U.S. Inventory Gain Natural gas futures in New York rose after a U.S. Energy Department report showed supplies rose less than analysts expected, forecasts for hotter weather in key consuming regions and as crude oil surged to an 11-month high

U.S. Leading Indicator Falls More Than Forecast; Manufacturing Gauge Slows A measure of the economy's future fell more than forecast in June, pulled down by a slump in building permits that signals housing will remain the biggest drag on growth.

U.S. Department of Energy to Auction Uranium in August The U.S. Department of Energy (DOE) announced today it was soliciting proposals to sell eight lots of Natural Uranium Hexafluoride (UF6) – up to 200 metric tons (MTU). Proposals are due August 17th and the anticipated award date of the sales agreement is August 31st. Delivery will be made at the Paducah (Kentucky) gaseous diffusion plant. Full payments for the eight lots are due by September 21, 2007. The amount being offered for sale, in terms of U3O8 equivalent, represents less than 520 thousand pounds. The auction comes at a time when the spot uranium price has retreated.

Massive spending for US infrastructure? The American Society of Civil Engineers estimates that it will take $1.6 trillion over the next five years to get the nation's roads, bridges, dams, water systems and airports into good condition.

Check out my new gold and energy blog at MoneyAndMarkets.com

The Good News on Gold

Gold is breaking out to the upside. This has been very good for the precious metals stocks in Red-Hot Canadian Small-Caps, Red-Hot Global Small-Caps and Red-Hot Resources ...

Gold Futures End At Six-Week High As Copper Rallies

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My Latest Money and Markets post ...

I'm traveling this week, so it's a light posting schedule. Here is my latest Money and Markets column. It was also mentioned in Agora's 5-Minute Forecast (http://agorafinancial.com/), pretty cool since they're a rival company to Weiss Research.

Profit from Oil's Next Surge (by Sean Brodrick)
Sean Brodrick tells investors why the bull market in commodities is far from over, and explains why uranium prices are set to soar.

Check out my new gold and energy blog at MoneyAndMarkets.com

Red-Hot Charts for Monday

Here are some charts with news stories about each ...Gold Trades in Asia Near a One-Month High on Dollar's Decline July 16 (Bloomberg) -- Gold traded near a one-month high in Asia as the dollar's decline boosted demand for the metal as an alternative investment. Silver gained. The dollar traded near a record low against the euro today before U.S. reports on inflation and housing. Gold generally moves in the opposite direction of the U.S. currency.

Qatar builds gold reserves Qatar central bank's gold holdings more than quadrupled between January and the end of April 2007, Gulf Daily News reported. Qatar held $193.1m of gold at the end of April, equal to about nine tonnes at market prices. The central bank could be increasing its holdings to hedge against a weak dollar, according to a Standard Chartered analyst. Qatar's currency is pegged to US dollar.

Brent Crude Oil Rises Above $78 a Barrel, Reaching 11-Month High in London Brent crude-oil futures traded above $78 a barrel in London for the first time since Aug. 9 as maintenance shutdowns limited North Sea supplies.

Gasoline Prices May Hold Their Gains Rising retail gasoline prices in most U.S. regions could hold their gains for a while, even after the problems that caused the run-up have been resolved. The national average retail price of regular gasoline jumped 9.2 cents to $3.054 in the last week, the biggest one-week gain since regular gasoline peaked above $3.20 a gallon in May. Oil-refinery problems in the last two weeks have tightened gasoline supplies during the summer driving season, when Americans cover more miles than any other time of year.

Check out my new gold and energy blog at MoneyAndMarkets.com

News You Can Use for Monday

MINING RICH SEAM OF MERGER MANIA

After weeks of speculation, British-based Rio Tinto is to pay $38bn (pounds 19bn) in cash for Alcan, the Canadian producer of aluminium, an essential material used to make aircraft components, soft drink cans and packaging. The deal, which will make Rio the world's largest mining company worth pounds 70bn, is the latest in a series of colossal mergers in the industry.

The value of deals struck so far this year has hit $139bn, according to research firm Dealogic, and could easily top last year's $220.5bn as analysts speculate over further mega mergers.

Uranium Short Sellers Make Record Bets Against Cameco, Market

July 16 (Bloomberg) -- An unprecedented number of short sellers are attempting to exploit the uranium mania that prompted more than 12 mining companies to quintuple their share prices during the past four years. Demand from utilities to fuel nuclear reactors has plunged 72 percent from an April 6 peak, according to TradeTech LLC, which has tracked uranium prices since 1968. In the second week of July, 3.4 million pounds of the metal was available, more than three times the amount purchased by power companies.

PetroChina's Production Climbs 3.7 Percent, Outpacing Exxon Mobil, Shell PetroChina Co., the nation's biggest oil company, increased first-half production 3.7 percent, surpassing growth at Exxon Mobil Corp. and Royal Dutch Shell Plc as China intensifies efforts to meet energy demand.

Yen Is Near Record Low Against Euro as Investors Increase Carry Trades The yen traded near a record low against the euro on speculation investors will keep borrowing the currency to buy higher-yielding assets in so-called carry trades.

U.K. Pound Rises to 26-Year High Versus Dollar on Outlook for Rates The pound rose to a 26-year high against the dollar on speculation the Bank of England will keep raising interest rates while the Federal Reserve stays on hold.

Check out my new gold and energy blog at MoneyAndMarkets.com

Summer in Maine

We sailed aboard the schooner Wendameen out of Portland Harbor on Friday. I got to raise sails, as did my daughter. She also got to hang out with the Captain and learn how to use a compass -- I guess she ranks higher than me, LOL.

Check out my new gold and energy blog at MoneyAndMarkets.com

My Latest Interview on Money Matters Radio

In which Tom and I talk about a whole range of topics: http://tinyurl.com/3e3tmj

Check out my new gold and energy blog at MoneyAndMarkets.com

No Surprise, But ...

Cameco's Cigar Lake uranium start-up may be delayed until 2011

Completion of the second phase to seal the water inflow, which flooded the underground project on October 23, 2006, was originally planned for completion during the third quarter of this year. Cameco said it now expects "it will require a number of additional months to seal the inflow and dewater the mine."

"In addition, in order to ensure a more conservative approach, we and our partners are examining whether an alternative route out of the mine is required prior to beginning excavation in areas at elevated risk of water inflow, and whether the second shaft needs to be completed to provide additional underground ventilation," the company said in a news release. "Completing the second shaft as a priority item and the delay in completing phase two...would set back the planned production startup date from late 2010 to 2011."

XX My take -- this is no big surprise. However, it should be bullish for uranium prices. Combined with the fact that China is pulling out of uranium exploration in Niger after one of its executives was kidnapped, uranium fundamentals are getting more bullish.

We are seeing bottoming action in uranium stocks, but it's a rocky bottom. Stay tuned.

Check out my new gold and energy blog at MoneyAndMarkets.com

My latest MoneyandMarkets.com column is up...

The Gold Rush in the Sea ...

Check out my new gold and energy blog at MoneyAndMarkets.com

Chinese Food Poisoning – It’s Worse Than You Think

I've written previously about the problem of Chinese food products being tainted with everything from banned food additives to antifreeze to downright poison.

According to the BBC, here is a list of just some of the things the Chinese have been CAUGHT putting in food they export …

Medicine contaminated with diethylene glycol (antifreeze) passed off as glycerin.

Gluten spiked with Melamine which poisoned so many of our dogs and cats

Toxic fish contaminated with banned antibiotics and chemicals

Juice with unsafe color additives

Tainted seasoning on snacks.

Pork tainted with clenbuterol, a banned feed additive

Also, toy trains made in China have been found contaminated with lead paint. While not strictly a food product, toddlers like to taste things.

Well, China is really embarrassed by the whole scandal, so it executed its corrupt, duty-derelicting former drug and food safety watchdog chief. Of course, now he can't answer embarrassing questions about the scope of the poisoning or who else in the government (especially his superiors) might have been paid off.

Anyway, his execution won't solve the problem, not by a long shot. Newsweek reveals:

China today resembles nothing so much as the United States a century ago, when robber barons, gangsterism and raw capitalism held sway. Now as then, powerful vested interests are profiting from murky regulations, shoddy enforcement, rampant corruption and a lack of consumer awareness. In the United States during the early 20th century, public outrage over bogus drugs and contaminated foodstuffs, fueled by graphic accounts such as Upton Sinclair's "The Jungle," finally prompted passage of the landmark Pure Food and Drug Act. China needs a similar revolution today if it is to protect its competitiveness and its consumers.

Gee, if only we'd known about this sooner. In a story behind the New York Times firewall, we learn: "In a case echoed by recent poisonings, at least 88 Haitian children were killed in 1996 by medicine made with a toxic syrup sent from China."

That's right! Our government has known Chinese products were unsafe for 11 years.

Well, good thing that at least now – NOW -- we have a food and drug administration here in the US to protect us from tainted Chinese food, right? Oh wait! As CNN tells us:

The 2002 Farm Bill passed by Congress mandated country-of-origin labeling for seafood, beef, lamb, pork, fish, fruits, vegetables and peanuts, but the Bush administration has delayed its implementation for everything except seafood until October 2008.

I'm starting to think the Bush Administration couldn't walk down the hallway without tripping over the wallpaper.

Here's a question for you – if it was al Qaeda doing this, and not China, would we stand for it? No. Hell, no!

Whole Foods Market is looking pretty good right now.

Check out my new gold and energy blog at MoneyAndMarkets.com

Red-Hot Chart Action

Check out my new gold and energy blog at MoneyAndMarkets.com

News You Can Use for Monday

Gold

Saudi Arabia, Egypt drive Dubai gold sales up 34 per cent in June "We are seeing a very strong demand from the Middle East and many expatriates are buying large amounts of gold for friends and families back home," said Tawhid Abdullah, managing director of the Dubai Gold and Jewelry Group. "We have seen a 34 per cent jump in sales value in June and I expect to see a 40 per cent increase in sales value in July."

India and China Expected to Equal U.S. Jewelry Market NEW DELHI (CommodityOnline.com) -- India and China are together expected to equal world's largest jewelry market, the United States, by 2015 when the global gems and jewelry trade is expected to touch $230 billion, states a new industry report.

Interest Rates

Garbage In, Carnage Out Interest rates on $800 billion in subprime loans will reset in 2007-2009, further endangering residential mortgage-backed securities. Originally constructed with premium AAA mortgage bonds on top, 'mezzanine' collateralized debt obligations in the middle, and high-risk, high-interest BBB and BBB- bonds on bottom, debt-rating agencies like Moody's and S&P then sugar-coated mezzanine CDOs by rating 80% of them AAA, assuming geographical loan diversification and varying 'slices' of debt values would protect the structure. Torrential-growth CDO² (BBB-only securities), twice removed from the loan collateral, are teetering -- just 5% in loan losses could render them worthless. Moody's forecasts 2006 subprime mortgage losses of between 6%-8%; some foresee 10%. After Bear Stearns (BSC), and UK's Caliber Global Investment subprime trouble, Canada's CIBC now admits it owns $330 million of subprime securities. Debt insurers Ambac (ABK) and MBIA (MBI) own almost $1b and $800m respectively. Unlike the $150b U.S. Savings & Loan bailout, subprime infection is global: German state banks, Asian investment houses, hedge funds and Wall Street firms are among subprime holders. Now debt-backed takeovers are losing investor appeal, and the ABX subprime index has lost almost 50% since January. Investors will likely pursue debt-rating agencies for misleading ratings. Barron's says subprime losses could surpass $100b.

U.S. Economy's Rebound May Be Bumpier Than Fed Expects as Credit Tightens What started as a financing squeeze in the subprime- mortgage market now threatens other parts of the economy. Borrowing costs for companies are climbing as banks and investors demand more for their money. Consumers feel the pinch from rising interest rates and sagging house prices. As a result, the economy may struggle to achieve the 2-1/2 to 3 percent growth rate that most forecasters inside and outside the Fed have penciled in for the second half of the year. Instead, economists at International Strategy & Investment Group, UBS AG and Commerzbank AG see growth below 2 percent as consumer spending slows and business investment fails to pick up under the weight of tougher financing conditions.

Bear Market Tightens Grip on Treasuries as Jobs, Inflation Trump Housing That's the conclusion of economists at Lehman Brothers Holdings Inc., Morgan Stanley and RBS Greenwich Capital. They estimate 10-year government notes will return 1.28 percent this year, not even enough to cover inflation. The performance would be the worst since 1999, when they lost 8.25 percent, Merrill Lynch & Co. index data show.

Uranium

Nuclear Cost Proves Prohibitive for Utilities as TVA Drives U.S. Revival President George W. Bush plunged into the cotton fields of northern Alabama last month to fete the restart of the Tennessee Valley Authority's oldest, most troubled nuclear reactor after a $1.8 billion renovation. Far more than safety and environmental concerns, the biggest hurdle to fulfilling Bush's ambition to build the equivalent of three new nuclear plants a year by 2015 is money. U.S. utilities will have to invest about $350 billion by 2025 to satisfy the country's growing appetite for electricity, according to Cambridge Energy Research Associates, a Cambridge, Massachusetts, consultant.

Geopolitical

Pakistan's Red Mosque Siege Is Organized by Terrorists, Government Says Terrorists are organizing the siege at Islamabad's Red Mosque and are preventing Deputy Chief Cleric Abdul Rashid Ghazi from surrendering, Pakistan's Minister for Religious Affairs Muhammad Ijaz ul Haq said.

Canada

Dodge May Raise Rate to 4.5 Percent, Ignoring Pleas of Canadian Exporters Bank of Canada Governor David Dodge may raise interest rates for the first time since May 2006, as exporters and unions warn an increase will send the currency to parity with the U.S. dollar and cost jobs.

China

China Shares Surge as Government Limits Stake Sales: World's Biggest Mover China's stocks rose, completing the biggest two-day gain in 11 weeks, after the government said it will limit sales of state-controlled shares as holding periods expire. Citic Securities Co. and China Vanke Co. advanced.

Energy

Russian Sales of Foreign Cars Surge 70 Percent, Led by Ford's Focus Sedan Russians bought 70 percent more foreign cars in the first half as rising incomes fueled demand for vehicles from automakers including Ford Motor Co., whose sales more than doubled.

Crude Oil Falls From Near a 10-Month High as U.S. Refineries Raise Output Crude oil fell from near a 10-month high in New York as some analysts and traders speculated recent gains were unjustified while U.S. refineries were increasing their output of fuel.

Ethanol Poised to Recover as Bumper Corn Crop Lowers Cost; ADM Shares Gain The steepest decline in ethanol since 2001 may be ending, buoying profits at Archer Daniels Midland Co., VeraSun Energy Corp. and Aventine Renewable Energy Inc.

Check out my new gold and energy blog at MoneyAndMarkets.com

Spot Price of Uranium Falls Again

According to TradeTech's Nuclear Market Review, the spot price of uranium oxide fell another $2 per pound this week to $133. The long-term price remains at $95. Other nuggets from the latest Nuclear Market Review …

Current active spot supply now totals over 3.2 million pounds U3O8 equivalent … Active demand is extremely weak with less than 900 thousand pounds U3O8 equivalent being sought by buyers, all of which can be characterized as discretionary in nature … With no "have to" demand present in the market, sellers are for the first time in many, many months showing a willingness to sell below the current published price in order to attract a willing buyer … This marks the first time since May 2001 that the spot uranium price has dropped in two consecutive weeks.

So the spot price is coming down and the long-term price remains strong. It had to happen sooner or later; let's see what opportunities this presents us.

 

 

Check out my new gold and energy blog at MoneyAndMarkets.com

The Atomic Python

Despite the small pullback in spot uranium prices, the white-hot metal is an a supply/demand squeeze of atomic-powered python proportions. Examples ...

THE WORLD’S URANIUM MINERS will have to double production by 2015 to meet demand, South Africa’s Nuclear Energy Corporation head Rob Adam calculates. To read more, CLICK HERE.

That sounds like a tall order. Meanwhile ...

UK Government gives go-ahead for 4 new nuclear reactors

Remember how anti-nuke Britain was just two years ago? I guess the times they are a-changin'.

And if you think that's bullish ...

New Report: We Need 3,000 New Reactors

That's what we'll need to stop global warming, according to one think tank.

Check out my new gold and energy blog at MoneyAndMarkets.com

News You Can Use for Thursday

The rest of this week is likely to be very light in volume, so as tempting as it is to buy, it's probably smarter to wait until next week. Until then, here is some news you can use, with my notes after selected stories …

China's Stocks Slide Most in a Month After New Share Sales; Sinopec Drops China's stocks fell the most in a month on concern $20 billion of planned share sales will overwhelm demand for equities as regulators seek to damp speculation in Asia's best-performing stock market.

Stocks Advance, Led by BHP Billiton, Rio Tinto on Higher Metals Prices Australian stocks rose, led by BHP Billiton Ltd. and Rio Tinto Group, after metals prices including copper and lead climbed.

XX Note – a certain small-cap nickel producer that Red-Hot Global Small-Caps subs recently added was one of those stocks that jumped today! We track double-digit open gains on this stock's shares on the ASX now (your gains may differ)

Crude Oil Rises to 10-Month High on Nigerian Supply Risks, U.S. Gasoline Crude oil rose to a 10-month high in New York on concern renewed violence in Nigeria and refinery breakdowns may curb U.S. fuel supplies.

Shanghai Starts Individual gold trade this month The beginning of gold trading by individual investors on the Shanghai Gold Exchange (SGE) later this month is expected to provide a welcome alternative at a time of high stock market volatility.

XX Note – 1.3 billion potential gold buyers … hmm ….

Meridian Gold rejects Yamana/Northern Orion 'bid' While Meridian Gold has yet to receive a formal offer from Yamana Gold and Northern Orion in their proposed three-way cash-and-stock bid for the Reno-based gold miner, Meridian's board Tuesday said it has decided Yamana's bid announcement does not "provide a basis to enter into discussions with Yamana."

XX Note – Red-Hot Canadian Small-Caps subs, you know that Yamana is in your portfolio. Meridian is playing coy, but don't sweat it too much. If the deal goes through, Yamana's stock should go up. If the deal doesn't go through, Yamana's stock should go up (the deal with Northern Orion is still on). The only thing related to this Meridian deal that has the potential to hurt Yamana's share price is if Yamana overpays for Meridian. Let's hope they're not that dumb (and they're not that dumb).

Silver price to remain high on investor interest The silver price is likely to remain in the $10-15/ounce range, despite the fact that the market remains in surplus. The Fortis/VM Group said in its debut Silver Book publication the silver price has recovered and is following an "upward trajectory" as the silver investor has returned.

Warning sirens blare as uranium melts down
Why the meltdown? Blame it on the price of uranium, which had soared as global demand for nuclear power surged, but fell last week for the first time in nearly four years.

XX Note – I enjoy hype as much as the next guy, but a $3 pullback in the spot price of uranium is NOT a meltdown. This pullback is something we've expected, it will likely be short-term, and it should be an extraordinary buying opportunity. Indeed …

Spot Uranium Price Declines – Finally "The long-term market is fine," Clark answered. "We still see considerable long-term activity, with no indication of softening prices there." TradeTech's long-term price indicator remained at US$95/pound.

West Texas reinventing itself with new energy projects Just last week, a University of Tennessee study projected that Texas would lead the nation in production of renewable energy by 2025, creating more than 173,000 jobs and adding about $22.8 billion annually to the state's economy.

Have a great Thursday!

Sean

Check out my new gold and energy blog at MoneyAndMarkets.com

Maine’s Gold Rush in the Sea

I was raised in Maine, and I'm visiting my old stomping grounds right now. One thing I've always liked about Maine is its rich history. Just about everything has happened here once (and sometimes twice). But for sheer strangeness, you can't beat the gold rush in Lubec, Maine in 1898.

Gold in Maine is found in bedrock, in sediments that were eroded by glaciers, and in stream deposits. Most of the gold in Maine comes from placer deposits in stream beds. These placer deposits were the source of significant gold discoveries in both Acton and Madrid, Maine, as well as smaller finds around the state.

But in 1898, two men showed up in Lubec, Maine, with an astounding idea: An amazing process to harvest gold from sea water.

Now, it helps a bit to know that Lubec is best described as "remote." It's the easternmost town in the US, way up near the Canadian border. That's probably why Rev. Prescott F. Jernegan and his boyhood friend Charles E. Fisher chose Lubec for construction of their "Klondike factory."

The official name of the company was the Electrolytic Marines Salts Company, or EMS. Jernegan and Fisher sold a "secret formula" to their new company in exchange for 45% of sales of company stock. This formula, according to Jernegan, was the end result of over 200 experiments using electricity and chemistry, designed to extract gold from seawater.

Jernegan explained that Lubec was the perfect site for the Klondike factory. Its position on the Passamaquoddy Bay gave it exposure to the huge rise and fall of the tides.

Investors lined up to buy shares of the company. After all …

Jernegan and Fisher came from respected Martha's Vineyards families.

Jernegan was a Baptist minister. His workmen were required to participate in regular Sunday prayer services. He was also a born salesman, with impressive communication skills. As the old timers say in Maine, "He could sell a werewolf a flea collar."

EMS poured money into the project, installing the town's first telephone and electric systems. The company even paid for half the cost of a new steel bridge (great for hauling away the tons of gold EMS was going to be gathering).

A Seductive Mix of Truth and Fiction

Now, there IS gold in seawater, but in very low concentrations – about 1 to 2 parts per 10 billion. But Jernegan and Fisher said their revolutionary process could get around that. Curious would-be investors who came to Lubec for the dog-and-pony show were led by Jernegan through Plant Number One. The tour went down the stairs and into a room beneath a wharf. There, visitors found 250 boxes, each containing a battery, some mercury, and a "secret recipe" of chemicals that would be the envy of Colonel Sanders.

These boxes, called "accumulators," were lowered deep, deep into the tide-churned salt water. Visitors saw the boxes go down. And they saw other boxes brought up after a 24-hour accumulation period. Cracked open like clams, they revealed their treasure – small but valuable deposits of gold and silver.

It seems like Jernegan was doing most of the hard work selling the company, doesn't it? Well, Fisher had a special skill that few knew about, one that made him invaluable to the company. He was a trained deep-sea diver. Just the type of man who could descend through the icy, inky-black depths of the night-time sea and put gold in the accumulator boxes! As one local folklorist recalls: "The next day when it was low tide, they'd take these accumulators out and low and behold, there was gold!"

On May 11, 1898, a local newspaper reported: "Nine shipments have been made from the works of the Electrolytic Marine Salts Mining Co. of East Lubec to date. They are said to have averaged about $1,000 apiece in value."

Of course, nothing of the kind had happened – Jernegan and Fisher were seeding the press stories just like they were seeding the accumulator boxes. But investors fell for it hook, line and sinker, especially because they heard that Plant Number Two would have 5,000 more of the magic accumulator boxes.

By the end of May, the locals – many of whom now had jobs building Plant Number One – were won over. The Lubec Herald gave Jernegan and Fisher a ringing endorsement: "We believe that time will prove these gentlemen of the EMS Co. to be staunch friends and people who will take a warm interest in the town." Locals dug up their hidden cash to get in on the initial cash offering of EMS.

But that local Lubec cash was small potatoes for the EMS boys. They aimed to hook the big money speculators. And man, did they land some whales!

EMS stock was offered at $1.00 per share. The first offering, for 350,000 shares, sold out in three days. By July, 2.4 million shares were sold to investors all over the East Coast, as 800 workers raced to finish Plant Number One.

The Bubble Finally Bursts

But then in July, Fisher left on business. A few days later, locals noticed that Jernegan was also missing. Concerned, workers went to his home, where they found the entire family had vanished, taking their furniture with them. Mysteriously, all of the company books and ledgers disappeared as well.

Now revealed, the EMS gold-from-seawater quickly went from venture to debacle. The July 29 Hartford Courant ran a banner headline: "The Bubble Burst." The stock imploded, tumbling from $1.40 to 30 cents per share. Warrants for Jernegan and Fisher were quickly issued, but they had both fled the country, their bags stuffed with cash. One Lubec local described the affair as "The biggest swindling scheme we ever had in Maine."

But that's not the end of the story ...

Fisher was never seen again, but most reports suggest he died in Australia.

Jernegan was discovered living in France. His wife and son had fled with him, but she later divorced him. Upon discovery, he insisted that he was trying to locate Fisher, who had taken valuable company records. The proper paperwork for Jernegan's arrest warrant did not come through in time for French authorities to arrest him, and Jernegan slipped away, reportedly to the Philippines.

Several stockholders refused to give up hope. Still confident that gold could be wrung from seawater, they kept at it for quite some time before finally throwing in the towel on the Electrolytic Marines Salts Company.

The defunct EMS Plant Number One was converted into a sardine factory. And guess what? The sardine harvest brought more wealth to Lubec than the gold scheme ever promised!

And the people who invested money in Jernegan's scheme shouldn't feel too badly. In 1905 –- just seven years after the Lubec debacle -- the Industrial and Engineering Trust Ltd. proposed to use its "secret process" to extract gold from sea water along the English coast. This scheme actually won the endorsement of Sir William Ramsay, a British winner of the Nobel prize for Chemistry. Like so many others, even the Nobel prize winner was snookered, and the scheme was a total fraud.

Check out my new gold and energy blog at MoneyAndMarkets.com

Traders Nation

I gave an interview a while ago about three hot metals and just got the link now. CLICK HERE.

Check out my new gold and energy blog at MoneyAndMarkets.com

Charts for Monday

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News You Can Use for Monday

Gold gains on security worries, dollar drop LONDON (Reuters) - Security concerns and a weaker dollar helped gold move further away on Monday from recent lows, but investors moved cautiously ahead of the U.S. Independence Day holiday, traders said.

"The terror attacks in the UK over the weekend could bring some safe-haven positioning into the gold market over the next few days, although with the Independence Day holiday in the U.S. on Wednesday, conditions are likely to be on the thin side," said James Moore, precious metals analyst at TheBullionDesk.com

Crude Oil Trades Near 10-Month High on U.S. Fuel, U.K. Terrorism Concerns Crude oil was little changed in New York, trading near a 10-month high, on expectations demand for gasoline will rise in the U.S. during the July 4 holiday.

Copper Rises to Six-Week High as Strikes Squeeze Stockpiles, Zinc Advances Copper rose to a six-week high in London on speculation strikes may put a squeeze on supplies as inventories of the metal dwindle. Zinc and nickel also advanced.

Uranium Prices Fall for First Time in Almost Four Years, TradeTech Says Uranium prices snapped almost four years of consecutive weekly increases as power utilities halted purchases, industry consulting company TradeTech LLC said.

Stocks Lose Takeover Premium as U.S. Buyouts Slump, Bond Yields Increase The steepest drop in mergers and acquisitions in 16 months is making U.S. stocks the most expensive compared with bonds in two years.

Jim Rogers Says He's Sold `Over-Exploited' Emerging Markets, Except China Jim Rogers, who predicted the start of the global commodities rally in 1999, said he's sold out of all emerging markets with the exception of China because they're ``over-exploited.''

Canada Dollar Reaches 30-Year High on Outlook for Interest Rate Increase The Canadian dollar reached a 30- year high on speculation the Bank of Canada will raise its benchmark interest rate as soon as next month

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