An E-Mail from a Worker at the Northwest Territorial Mint

This week, I wrote a MoneyandMarkets.com article, "Yes, We Have No Silver", about my experiences trying to buy physical silver. I mentioned the Northwest Territorial Mint. I just received a letter from one of the fine folks who works there. It reads ...

Hello Sean,

I read your article today speaking of the lack of silver in what is still the free market. I happen to work at the Northwest Territorial Mint. You are not kidding about people having trouble getting silver. I can tell you from first hand experience that we are working 10-12 hour days, and looking into starting another shift to keep up with the production of silver. It is selling faster than we can make it, that is when we get it in. Our crucible is running from about 3 AM to around 10 PM. As soon as we get any silver in it goes right out the door again. I have worked there a number of years and have never seen it so busy, nor seen us as strapped for silver.

But if you get the opportunity to mention that we do get the silver to our customers, as quickly as we can, plus that we are one of the few places that does have silver, we would appreciate it very much. Our bullion sales department is treated very harshly by many people who are calling to get silver and gold, who are understandably frustrated by the delay. The NWTM has a long history of making good on our sales, and will remain to be a great source for investment commodities.

Thank You,

Jonny

XX Sean's note -- I did indeed have the opportunity to buy silver bullion (a private deal, not from the Northwest Territorial Mint). And I'll probably buy some from NWTM when they are able to work through their backlog to reach shorter delivery times.

And have you seen the price action in gold, or the larger-cap gold and silver stocks today? It sure looks good, but if you received my recent gold report, wait for my weekly buy signal. The bears still rule until we get that.

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

Gold Chart -- Gold Tests Support

The US dollar is strengthening as capital flees higher-risk economies and flowing into the greenback. And this is weighing on gold, bringing it down to its first weekly uptrend ...

There is support below this, at at 738.90, and then the second uptrend comes into play around 675. Will gold go that low? And would it be the buying opportunity of the year if it did?

And here's my latest MoneyandMarkets.com column, "Yes, We Have No Silver".

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

Gold Sells Off as Investors Raise Cash

So much for chart action. Bloomberg tells us ...

Gold tumbled from the highest since July as the dollar strengthened and investors sold the metal to cover losses in equity markets. Silver plunged 11 percent.

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

Happy Friday -- I.O.U.S.A

It’s the weekend. You should go see the movie “I.O.U.S.A.” Some very smart people I know at Agora are deeply involved in the making of this movie. Here’s Roger Ebert’s review.

In Other News ...

China’s Oil Thirst Hits New High

China's oil demand growth hit a two-year high in July but the pre-Olympic spurt will likely fall off in the autumn, undermined by high prices, global economic woes and the end of official pressure to stockpile for the games.

XX Sean’s note – funny, but I’d think that after the Olympics (or at least, after the Para-lympics), China’s oil demand will ramp up again. We’ll have to see.

China Warns on Winter Energy Supply

China warned on Thursday that its energy supply problems were likely to last into winter as it struggles to ensure stable sources of coal, oil and power, the People's Daily reported, citing a senior official.

Some markets are too illiquid to trade. Here is a cautionary tale about rhodium (with charts).

On the other hand, money is pouring into the SLV (silver ETF).

So much for a surplus of gold. You can’t buy American Gold Eagles now if you want to.

You know how things were going pretty well in Iraq lately because a bunch of Sunnis switched sides and became our friends (because we were paying them)? Well, now, the Shi’ite-led government of Iraq has decided to arrest and/or kill those Sunnis. It makes you wonder whose side the Iraqi government is on, anyway.

Want to know more about Obama’s economic plan? The New York Times breaks it down for you.

And here's some dance music to get your weekend off to a good start.

Happy weekend!

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

Commodities Feel The Heat

CRB Index Drops Most in 28 Years as Nickel, Natural Gas Tumble on Dollar Tumbling prices for natural gas, nickel and corn are turning July into the worst month in 28 years for the Reuters/Jefferies CRB Commodity Index.

U.S. Recession May Have Begun in Last Quarter of 2007.

The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, signaling that the country is in worse shape than investors had anticipated.

``We're in a recession,'' Allen Sinai, chief economist at Decision Economics Inc. in New York, said in a Bloomberg Television interview. ``It's going to widen, it's going to deepen.''

Crude Oil Declines More Than $2 as Fuel Demand Drops to a Three-Year Low Crude oil fell more than $2 a barrel, capping the biggest one-month decline since December 2004, as a slowing U.S. economy caused fuel consumption to weaken to the lowest in three years.

Gold Jumps as Dollar Drop Boosts Investor Demand for an Alternative Asset Gold gained the most in three weeks after a report showed weaker-than-expected U.S. growth during the second quarter, sending the dollar tumbling and boosting the appeal of the metal as an alternative investment. Silver rose.

XX Sean's note -- silver did more than rise. It's leading the way ...

And the rally in gold and silver is taking place despite bullish action in the US dollar ...

Electricity Storage Discovery May Be Boon for Solar Power, MIT Study Says A new, cheaper way to store electricity to run air conditioners or vehicles promises to make solar power competitive with traditional generation, Massachusetts Institute of Technology researchers said.

Money for crop research just a drop in the bucket

WASHINGTON — A deadly wheat fungus known as stem rust is shriveling crops from Africa to the Middle East, threatening the breadbasket of Pakistan and India, and could eventually reach the United States.

The potential threat to food supplies and the economy is enormous, yet Congress and the White House during the past several years did not react to urgent pleas from U.S. scientists for millions of dollars to develop wheat varieties resistant to stem rust. Instead, the main federal lab working on the disease fought budget cuts.

Arctic ice bigger than 2007, but thawing long-term

OSLO (Reuters) - Arctic sea ice is unlikely to shrink below a 2007 record low this year in a reprieve from the worst predictions of climate change even though new evidence confirms a long-term thaw is under way, experts said.

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

Charts -- Oil and Gold Blast Off!

I posted this on my blog this weekend, but just in case you didn’t see it …

Fortis Expects Complete Breakdown of the American Financial Markets Within Days or Weeks
RUSSEL/AMSTERDAM (DFT) - Fortis expects a complete breakdown of the American financial markets within days or weeks. This explains, according to the bank insurer, the series of interventions on Thursday with the aim of strengthening themselves by € 8 billion. "We are ready at the last moment. The U.S. is doing much worse than we had thought,” said Fortis chairman Maurice Lippens, who insists that CEO Votron shall not be replaced. Fortis expects bankruptcies of 6,000 U.S. banks that have low coverage. "But the same goes also for Citigroup and General Motors, and thereby starts a complete meltdown in the U.S.”

In other news …

Oil Rises to Record Above $143 on Concern Iran Supplies May Be Disrupted Crude oil rose to a record above $143 a barrel on speculation the dispute over Iran's nuclear program may disrupt supply from OPEC's second-largest producer.

XX Sean’s note – yeah, that’s really the reason. “Concern.”

BIS Warns of Deepening Contraction (Not for the Fainthearted)

"The current market turmoil is without precedent in the postwar period. With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point," it said.

Gold Rises, Set for Quarterly Gain, on Dollar; Platinum Climbs

Gold may extend gains as the European Central Bank prepares to raise borrowing costs on July 3, pushing the dollar lower against the euro, said Manqoba Madinane, an analyst at Standard Bank Group. The U.S. currency has fallen 7.7 percent against the euro so far this year, while gold has advanced 12 percent.

Blind Dog Finds Bone

Thomas Friedman actually says something worthwhile in his most recent column …

“Since President Bush came to office, our national savings have gone from 6 percent of gross domestic product to 1 percent, and consumer debt has climbed from $8 trillion to $14 trillion.”

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

Why Endeavour Is Heading Higher Today

Endeavour Silver is one of the recommended positions in the Red-Hot Canadian Small-Cap portfolio, and I talked about it in a recent Money and Markets.com column after my trip to Mexico. It had some good news today ...

Endeavour Silver Discovers Several New Zones of High Grade Silver Mineralization on San Pedro Properties in Guanacevi

This has sent the stock up by over 6% today. Go, Endeavour!

By the way, here's my MoneyandMarkets.com column for today: Get Rich as Gas Goes Supersonic

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

Money and Markets -- For a Fistful of Silver

"For a Fistful of Silver" was my original name for today's MoneyandMarkets.com column. My editors replaced that with "Finding Attractive Mexican Miners," which sounded to me more like a Craiglist personal ad than a financial piece.

We were able to compromise on "Once Upon a Time in Mexico." I can live with that.

Once Upon A Time in Mexico
by Sean Brodrick
Wednesday, June 04, 2008 7:30 AM
In the mid-1500s, legend has it that Spanish explorers were traveling through the Guanajuato region of Mexico when they camped for the night by the side of a river. They piled stones in a ... [More...]

Other News You Can Use ...

South African Gold Output falls 15.6% in Q1

South Africa's Chamber of Mines said on Tuesday the country's gold production fell 15.6 percent to 52,228 kg in the first quarter of 2008 compared to the fourth quarter of 2007, owing to a power shortage. On a year-on-year basis, the rate of decline in gold production was 16.8 percent in the first quarter of 2008.

Oil Inventory Numbers Come Out Today

Today's inventory report will be delayed by 5 minutes. It will be released at 10:35 AM Eastern time until further notice. At any rate, the the consensus analysts' estimates are ...

Crude Oil, UP 2.7 million barrels.
Gasoline, UP .9 million barrels.
Distillates, UP 1.6 million barrels.

We'll see how things work out.

United Will Shrink Fleet by 70 Planes, Eliminate 1,100 Jobs, Scuttle Ted UAL Corp.'s United Airlines, the world's second-largest carrier, will ground 70 additional planes, cut as many as 1,100 more jobs and shut its low-fare Ted unit to help counter record fuel costs.

Commodities to Be `Much, Much Weaker' as Dollar Strengthens, Gartman Says Commodities will become ``much, much weaker'' after Federal Reserve Chairman Ben Bernanke signaled support for the U.S. dollar, Dennis Gartman, economist and editor of the Gartman Letter, told clients.

XX Sean's note -- Gartman's view can sway the markets, so he's usually right for about three days. Then again, with Bernanke coming out and supporting the dollar with strong words yesterday, I do expect the US dollar to bounce anyway. Much bigger worries are that 1) Asian governments are limiting oil, gasoline and diesel subsidies and 2) the US government may restrict commodity markets ...

1) India and Malaysia raise price of subsidized fuel With no end in sight to high world oil prices, India and Malaysia on Wednesday became the latest Asian countries to risk the wrath of voters by raising the price of subsidized fuel, a highly unpopular measure that could further weaken the governments of both countries made fragile by recent electoral setbacks.

The moves follow similar price increases in Indonesia, Pakistan and Sri Lanka and are a recognition by governments that they can no longer shelter their populations from the spike in energy prices.

2) Corn Falls on Dollar's Rally, U.S. Government Investigation; Wheat Gains Corn futures declined for a second day in Chicago on speculation the dollar's recovery and a government investigation of U.S. futures trading may reduce investment demand. Soybeans were little changed and wheat rose.

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

Money and Markets -- Silver and More

My latest MoneyandMarkets.com column is up.
Special Dispatch from Mexico: Silver Vein Discovered!
by Sean Brodrick Wednesday, May 28, 2008 7:30 AM

Greetings from Mexico! I'm traveling this mineral-rich country in search of conquistador silver. Yes, mines that the Spanish discovered and worked in the New World are still being worked today ... [More...]

XX -- Sean's comment: While I'm happy with the story and the editing, the title is weird.

More news you can use ...

Crude Oil Is Little Changed as Morgan Stanley Says Brent May Reach $150 Crude oil was little changed after Morgan Stanley said that Brent oil from the North Sea could ``easily'' reach $150 a barrel.

XX Sean's comment -- way to go out there on a limb, Morgan Stanley. Ha!

Gold futures fall below $900 as dollar firms
Gold futures slid for a second day on Wednesday, pushing prices below $900 an ounce as a less-than-expected decline in new orders for U.S.-made durable goods helped provide support for the U.S. dollar.

Durable-Goods Orders Ex-Transportation Unexpectedly Jumped 2.5% in April Orders for U.S. durable goods excluding cars and planes unexpectedly rose in April, signaling that international customers are helping factories ride out the economic slowdown.

Wheat Falls as Condition of U.S. Crop Improves, Easing Concern for Supply Wheat fell for the first time in three sessions after a government report showed the condition of the U.S. winter-wheat crop, which growers are harvesting now, improved last week.

XTO Agrees to Buy Bakken Shale Assets for $1.85 Billion From Headington XTO Energy Inc., the oil and natural- gas producer that has spent more than $2 billion on acquisitions this year, agreed to buy properties in the Bakken Shale in Montana and North Dakota from closely held Headington Oil Co. for $1.85 billion.

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

Mine Exploring -- Do You See What I Guanacevi?

Sunday, we flew across the Sierra Madres to Guanacevi, where Endeavour Silver has a mine project. I've been to Guanacevi before (the stock is in our Red-Hot Canadian Small-Caps portfolio).
While there have been many changes, one thing that hasn't changed is Guanacevi International Airport. We still land in a horse pasture. Last time, we had to chase the horses out of the way to take off, but this time the local equine population was more under control (and probably snickering at the foolish gringos under their breath).

Then we hop in trucks and drive to a spot where we can look out over the town.
Those lonely chimneys you see are chimneys left over from Cornish tin miners. This area has been mined by a lot of people -- the natives, the Spanish, the cornish, now the Canadians -- and there is STILL plenty left.

From this same vantage point, you can also see Endeavour Silver's mill and plant ...

We'll get there eventually, but first, it's time to suit up and head into the mines.And yes, it was pitch dark except for our head lamps. This mine is working so hard that we took a tour of an area that had been blasted out fresh just the day before. Not much to see there. But I thought this was cool ...

It's an ore chute. This is a hole in the "floor." Mine from one level is scooped up and dumped down the hole, to a waiting truck below. It's just an example that you have to watch your step or risk a potentially crippling fall.

But ahh, we're here to have fun. Here, Dan Heard of Williams Financial Group hops behind the wheel of one of the mining tractors.
Don't worry -- the people running the mine aren't dummies. They wouldn't let us drive these massively horsepowered vehicles through tunnels of pitch darkness. At Guanacevi it's safety first.

And here, Godfrey Walton, patient as usual, explains what the heck we're seeing deep inside the Porvenir Mine at the Guanacevi project.


Finally, it came time to leave. We still had to tour the plant, and if we ran any later than 3:00, the winds would shift and we wouldn't be able to take off, so we'd be grounded overnight. Time to go!

That's Bob Moriarty of 321Gold.com on the left, Jeff Clark of Casey Research in the center and me on the right. We're all squinting like Morlocks because we just came up from the mine.

As we stood there, a giant truck went by us, carrying ore from the mine to the plant.
The truck takes the ore to the plant, where the ore is processed and finally put in a furnace so it can be melted into bars ...And here is what the silver looks like when it is poured into a dore bar. A dore bar is a crude silver bar that contains some gold ...

And I get to hoist the silver bar. It weighs a LOT. Some of the people on the tour actually asked our guide if they could take the bar with them. He replied: "Oh, sure. Run as fast as you can. We'll see how far you get before the guard shoots you."

I saw the guard -- he has a black hard hat to match his black uniform and a Big Frakking Gun. No fooling around for that guy.

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

Uh-Oh! Gulf States May End Currency Peg to US Dollar

We hear from Bloomberg that both the United Arab Emirates and Qatar could abandon their currency pegs to the U.S. dollar in favor of a basket of currencies within months, and Saudi Arabia may follow the move late next year. They would all be following the lead of Kuwait, which last year broke from its neighbors and fixed its dinar to a basket of currencies.

Why are the Gulf States doing this? Thanks to surging energy prices, Gulf nations are experiencing an unprecedented boom, and an increasing inflation problem. Yet their currencies are depreciating and their central banks are under pressure to cut their nominal interest rates to match the Fed.

Plainly, the US Fed's easy money policy does not work for them. Even though many investors believe the US interest rate easing cycle is at an end -- futures on the Chicago Board of Trade showed traders saw a 92% likelihood the Fed will keep its target rate for overnight lending between banks at 2% on June 25, up from odds of 88% on May 21 -- it's too little, too late for the Gulf states.

What's more, Forbes quotes Deutsche Bank and others as saying that the Fed may NOT be through cutting rates, and may drop the benchmark from an already low 2%.

Continued cuts in the Fed benchmark rate could grease an already slippery slope for the US dollar. Since the Fed cut rates from 5.25% to 2% since last August, wholesale inflation has increased to 6.5% year over year and the price of oil has soared to over $130 from $70. A global supply/demand squeeze for distillates like diesel gets much of the credit, but the meteoric rise in oil prices wouldn't have happened without the Fed's help. If the value of the US dollar had just held steady since August, the price of oil would be under $90 a barrel.

And as bad as inflation is, it's probably much worse than the government admits. ShadowStats.com is a website that tracks the Consumer Price Index the same way it was before the Clinton administration started monkeying around with it. And according to ShadowStats, consumer price inflation is running at more than 3 full percentage points hotter than the government says. Would the government lie to you? Hahahahaha!

And this is my long-winded way of getting to my subject: Gold and silver prices. It seems that foreign governments, especially those in the Persian Gulf, are losing their faith in the almighty dollar and the policies of the US government. That undercuts the mighty greenback's standing as the world reserve currency. Now, that doesn't mean your dollars become worthless overnight. But the more its reputation gets chipped away, the faster its downward slide can become. I think this has the potential to heat up the fires under gold and silver quite a bit.

If paper money becomes devalued, people will put more faith in hard currencies. More and more Moms and Pops put a few gold and silver coins away "just in case," and the trickle we see in gold and silver coin investing now can become a flood. And thus we learn from the Wall Street Journal that demand is simply overwhelming the supply of US Silver Eagles. Why are so many "early movers" suddenly buying silver coins. What are they afraid of?

As the old saying goes, if you have to ask that question, you haven't been paying attention.

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

Saturday Mine Spelunking -- Going Deep

Man, what a long day Saturday was. I visited two mines and then took a long ride in a small plane (so that today, I can look at another mine). Here are some photos ... First, we tromped into a mine ...Next, I'll show you one of the wider passages of this old mine. Remember, we're in Mexico, and these mines were first opened decades, even centuries ago, so people were smaller. In the SMALL passages, I (BANG!) kept hitting (BANG!) my damned (BANG!) head on the ceiling! Thank heaven for hard hats. Another analyst, Dave, is even taller than me, so I was trying to use him as a judge of when I should duck. But I found out later he was using me for the same purpose, and from the number of headers I took into solid rock, I think he's better at this game than I am. Anyway, you've heard the phrase "dark as a coal mine"? Well, coal mines have nothing on certain silver mines I could name ... In the photo above, we are looking up at galleries that are carved out of the mountain. The chambers seem to go on forever ... And here we get to the prize (below). A vein of silver running through the rock ... Next, we went to an old ruin of a mine that is being explored for potential mining today. It had a certain "Indiana Jones" feel, like we were walking around abandoned temples. Also, vast pits opened all around us, where mining had been done in the past. However, it was important to come here, as the geologist in the picture below was showing us ... ... because here, you can see where the silver vein comes right to the surface. It has been marked with paint.And more paint on the rocks shows us where the vein continues right up the side of the mountain ... When the Spanish came to these mountains, they found these visible veins and would follow the visible silver down into the rock, burrowing out narrow, twisty passages and galleries by lamplight. Eventually, they got down deep. And that's where we went next. Here, a bunch of people cram into an elevator that was even smaller (if possible) than the one from the other day ... And after a noisy, creaking, jerking ride, we arrive at the bottom of the old shaft ... Then it's trudge, trudge, trudge to where the new mining is going on. I took this next shot from one chamber through a hole in the rock into the next chamber where a bunch of miners are working. And in this next photo, you can see the silver vein running right over my head ... Finally, we get to the prize: Core samples rich with silver, and some gold, too. We also took a tour of the very modern plant that my hosts picked up for dirt-cheap.Don't worry, readers. I'll be revealing more about this in future issues of Red-Hot Canadian Smal Caps, Red-Hot Global Small-Caps, and at MoneyandMarkets.com

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

News You Can Use for Wednesday -- Crude, Gold and Silver

Have I mentioned that I hate flying? I SO wish there was a train to Mexico, LOL.

Anyway, here's what I'm reading to keep my jangly nerves from exploding ...

Petrobras to Order $30 Billion Worth of Drill Ships, Rigs for Tupi Site Petroleo Brasileiro SA, owner of the Western Hemisphere's largest oil discovery in three decades, plans to order 40 drilling ships and platforms worth about $30 billion for delivery by 2017.

Soybeans Decline After Argentine Farmers Announce Plan to Suspend Strike Soybean futures fell for a third day in Chicago as Argentine farmers planned to suspend a national strike that has disrupted grain exports in a bid to revive talks with the government over tax increases.

Crude Oil Rises Above $130 a Barrel for First Time as Banks Up Forecasts Oil rose above $130 a barrel for the first time after at least five banks raised price forecasts in the past week on expectations supply constraints will persist.

Kazakhstan bans export of oil products amid soaring fuel costs
Kazakhstan on Monday banned the export of all refined oil products, news agencies reported, as the energy-rich Central Asian nation grapples with soaring fuel costs. The announcement, made by Prime Minister Karim Masimov at a government meeting, comes just days after opposition parties called on his government to resign amid what they call a worsening economic climate.

Gold Gains for Fifth Day as Record Crude Oil Fans Inflationary Concerns Gold gained for a fifth day to trade near a one-month high in Asia as crude oil held close to a record, stoking inflationary expectations, and the dollar fell.

En route through unknown Mexico: Silver State Zacatas
The Mexican state of Zacatecas is marked by desert and half-desert in the foothills of the Sierra Madre Occidente. Precious metals like silver and gold have always attracted people to the area. Indeed, without gold and silver even state capital Zacatecas, some 600 kilometres north of Mexico City, would probably not exist.

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

Where in the World Is Sean Brodrick?

I’m waiting for my plane in Ft. Lauderdale. Then, after a stop in Texas, it’s off to Mexico.

My first stop is an amazing city. Let me tell you about it ...

The city was founded on silver. A large silver vein found in the 16^th Century sparked a silver rush. As the number of miners grew, the mines became larger and the mountains of ore became mountains of silver.

The city was originally built over a river, which flowed through tunnels underneath the city. However, after years of raising buildings due to floods, engineers built a dam and redirected the river into underground caverns. The tunnels were lit and paved with cobblestones for traffic, and this underground road network carries the majority of cars driving through the city today.

The city played a major part in the Mexican War of Independence.

To the west of the city is a famous cemetery noted for the natural mummies produced by means unknown. About 1 in 100 bodies buried there experience natural mummification.

The dead don’t necessarily rest easy here. In the late 1800s the town instituted a "burial tax.” When poor families can’t pay the tax, their relatives are dug up and placed on public view in a purpose-built museum, which still adds corpses to this day.

Places that were silver mines of old are now under this city. Only visible silver was mined, which means there is plenty left in place. This presents the cityfolk with a interesting quandary: Do they want to dig up parts of the city to get the silver?

Can you guess what city this is?

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

News You Can Use for Thursday -- Silver, Gold, Oil and More

Potentially HUGE news for platinum (and not good news) ...

New Mitsui Mining Autocatalyst Uses Silver, Not Platinum

Mitsui Mining and Smelting Co Ltd said on Wednesday it has developed a new catalyst for diesel engine cars that replaces the use of platinum with silver, a less conventional but much cheaper metal.

By substituting platinum with silver, the cost of precious metals in the production of autocatalysts, which clean car exhaust fumes, would be cut by more than 90 percent, the company said.

Bloomberg has MORE. However, the company won't start selling these new autocatalysts until 2012.

Rice Climbs Above $25 For First Time as Wal-Mart's Unit Limits Purchases Rice advanced above $25 for the first time as Wal-Mart Stores Inc.'s Sam's Club warehouse unit restricted purchases of some types of rice in the U.S.

XX a friend of mine with connections at Costco (!!) tells me that the price of Basmati rice at that retailer is going up on April 28th.

Soybeans Rally on Concern of Reduced Supply in Argentina as Strike Resumes
Farmers went on strike last month for three weeks leading to food shortages across the South American nation. Argentina is the world's third largest soybean supplier and leader in the sale of animal feed and vegetable oil made from soybeans.

Farmers need dry weather or food costs could go even higher
Experts said prices could rise more if a wet spring continues across the nation's midsection and further delays farmers from planting crops in muddy fields. Supplies already are tight and worldwide demand for grain shows no sign of letting up.


Gold Falls for a Sixth Day in London as Dollar Strengthens Against Euro Gold declined for a sixth trading session in London as the dollar strengthened against the euro, eroding demand for the precious metal as a hedge against further drops in the U.S. currency.

Brazil Oil Finds May End Reliance on Middle East, Forecaster Zeihan Says Brazil's discoveries of what may be two of the world's three biggest oil finds in the past 30 years could help end the Western Hemisphere's reliance on Middle East crude, Strategic Forecasting Inc. said.

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

Monday Is Chart Day -- Oil, Gasoline, Silver & More

So glad to be long oil stocks and natural gas today, with oil over $117 and natural gas climbing. Oil Rises to Record Above $117 After OPEC Says No Need to Boost Production Crude oil rose above $117 a barrel for the first time after OPEC said it will maintain production, rejecting calls from the U.K. and Japan to boost output.

Gold and silver underperformed energy last week – we could see some weakness in the short-term. That could be a set-up for a big move higher.

Codelco Opens One of Three Strikebound Copper Mines as Workers Defy Picket Codelco, the world's largest copper producer, reopened its El Teniente mine after night-shift employees crossed barricades of striking contract workers. Two other Chilean copper mines remained closed as the strike, which propelled copper prices to a record high, continued a fifth day.

More News You Can Use ...
Dollar Decline Decelerates With G-7 Blessing as Weakening Shows No Endgame Traders betting on intervention by the Group of Seven nations to stem the dollar's 7.7 percent decline against the euro this year may be disappointed.

Gold Erases Gain in London; Dennis Gartman `Abandoning Ship' From Outlook Gold erased gains in London after Dennis Gartman said he is ``abandoning ship'' on his outlook for higher gold prices.

Asia May Risk `Silent Famine' as Poor Can't Afford Food, UN Agency Warns A ``silent famine'' risks emerging in some Asian countries where food prices including rice are escalating beyond the reach of the poorest people, the World Food Program warned.

And Uranium Drops a Bit More Long term prospects and short term supply-demand characteristics in the uranium market continue to clash with market watchers and researchers clinging on to a continuously bullish outlook for the commodity, only to see the spot price move into the opposite direction.

South Australian Grain Regions May Get Best Rain in Five Months Grain farmers in Australia, the world's sixth-largest wheat exporter, rely on rain at this time of year to plant winter crops including canola, barley and wheat. The nation's wheat output is forecast to almost double to 26 million metric tons this year as farmers seek to benefit from prices that reached a record.

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

Bullish Silver Factoid and Chart

The iShares Silver Trust (SLV) now holds 184.7 million ounces of silver. That is more than 20% of the world’s TOTAL demand for silver in 2006, the last year for which The Silver Institute has published records and MORE than the total amount of silver produced by mines that year -- 161.4 million ounces.

In other words, silver ETFs around the globe are becoming a real force in the market.

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

Charts to Ponder While We Nurse our Bruises

Investors had their eyes glued to the price of oil as it went higher and higher these past weeks. But just to show how quickly things can change, oil got creamed on Wednesday – along with the rest of the commodity sector. Still, even with that one-day plunge, the 19-member Reuters/Jeffries CRB Index is still up 8.31% since the beginning of the year. Compare that to the 8.6% LOSS in the S&P 500 index.

And oil is still being outperformed by most of the rest of the OTHER commodities in the Reuters/Jeffries CRB Index.

Crude oil is #11, behind #10 gold and #9 corn. The top three performing commodities this year have nothing to do with energy – cocoa, silver and aluminum.

Meanwhile, the U.S. dollar index, which compares the greenback to the world's major currencies, has fallen about 6% this year and is near its lowest levels ever. Recession fears are driving the greenback lower as jobs disappear, home prices fall and consumer confidence plummets.

That was the trend that was holding until Tuesday, when the dollar started going up, and commodities peaked.

The question facing us now -- Is this top in commodities a short-term correction, or the start of something bigger?

Here are some charts to look at while we ponder that question ...

Oil and gold often move together. Will that continue?

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

Commodity Crunch

We're having problems putting charts in our issues today. Here are two I wanted to include in the Red-Hot Commodity ETF issue ...

A trader friend tells me: Counterparty risk is a real issue for the ETNs. If Barclays were to go belly-up, everybody who owns iPath notes is at risk. ETFs are a different structure that are not as vulnerable in this way.

NOTE: No one says Barclays is going belly-up. It's just that ETNs have (a very small) risk that ETFs don't.

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

Monday Is Chart Day

The stock market seems to be on the Slip 'n' Slide of Doom, but select commodities are another story. Take a look at these charts ...
Put on your crash helmets, folks, it's going to be a wild ride today!

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