I Zinc we are at a bottom

I added BWR at 2.66 today, its a hunch that we are now at a bottom, lowers my average and sets me up for either more pain or more gain. Time will tell!

Leo (July 23 — Aug. 22)

You like pushing your luck and are not afraid to experiment, but there is a difference between dangerous gambling and calculated speculation. A hunch today is not as risky as you might think.






Dodge sounds alarm on dollar's surge

Fast rise in currency out of sync with domestic factors, Bank of Canada Governor asserts

HEATHER SCOFFIELD

From Monday's Globe and Mail

October 22, 2007 at 2:20 AM EDT

WASHINGTON — The Canadian dollar has soared to unjustified heights, Bank of Canada Governor David Dodge said Sunday, in his strongest suggestion to date that the loonie has gone too far too fast.

“The recent round of appreciation has been abnormally quick and doesn't seem to be related to the domestic factors, which would normally lead to that sort of appreciation,” Mr. Dodge told an audience of international bankers after a weekend of International Monetary Fund meetings.

His assessment dovetails with comments made by Finance Minister Jim Flaherty on Friday, when he complained that Canada is bearing more than its fair share of the appreciation of world currencies against the U.S. dollar.

The Canadian dollar closed at $1.0355 (U.S.) on Friday, up 21 per cent since the beginning of the year. Most of that appreciation happened since August.
Until now, Mr. Dodge has said the Canadian currency deserves to be strong because the Canadian economy is strong, because the world loves Canada's oil, gas, grains and minerals, and because the Canadian dollar was rising from unacceptable lows.

Last week, he admitted that part of the loonie's recent surge was not really related to economic fundamentals, but glossed over the $1.03 level because he didn't want to make too much of temporary blips in currency trading.

By Sunday, however, alarm bells were ringing.

“Our terms of trade have improved a little over the past three months, but not a lot.” Mr. Dodge said.

“The U.S. dollar has deteriorated a bit, but again, probably not as much as one would see … that would give us that much impetus.”

The European Union has also expressed deep concern about the appreciation of the euro against the U.S. dollar. But at the IMF and Group of Seven meetings this weekend, many analysts believe the American currency may continue to depreciate as the housing recession undermines the powerful U.S. economy.

Despite the concerns, the finance ministers and central bankers were short on solutions. They decided against intervening in currency markets to shore up the U.S. dollar, and conversely taking some strength out of the Canadian dollar and the euro.

Rather, they pointed to the need for China to move more quickly in letting its currency float.

Indeed, economists in Canada have said that any complaints from Mr. Dodge or Mr. Flaherty about the loonie amount to jawboning, since the Bank of Canada has said it does not want to cut its key interest rate quite yet. An interest-rate cut may have the effect of bringing the loonie back down to earth somewhat.

Meanwhile, Mr. Flaherty Sunday continued his latest crusade, calling for domestic retailers to reduce prices quickly to reflect the higher Canadian dollar. Speaking to CTV's Question Period ahead of a meeting Tuesday with a range of retailers, including Canadian Tire and Wal-Mart, Mr. Flaherty said he wants to see lower prices “as soon as possible.”

“My job really for the government is to say to the retailer that you should move your inventory prices as quickly as you can to reflect the reality that the Canadian dollar is much stronger than it was even a few months ago,” he said.

Some businesses, such as Wal-Mart Canada Corp. and Zellers Inc., have already cut prices but a Canadian business leader said it will take some time for the majority of the country's firms – small businesses – to move through older inventory.

Catherine Swift, president of the Canadian Federation of Independent Business, said Mr. Flaherty should “know better” when it comes to lecturing entrepreneurs.

“It's simplistic to say, ‘Cut your prices.' It'll happen. It's a very competitive market. Our members have to stay current in terms of pricing. The market does work and the market will work – but to think it'll turn on a dime, that's pretty unrealistic. Some people are carrying older merchandise,” Ms. Swift said in an interview yesterday.

“I always have the same reaction when I hear politicians or bureaucrats telling business how to do business. Jim Flaherty has done a lot of good things for small business but it's very easy to give that kind of feel-good advice, something that will be well-received by your average consumer, but the circumstances of every business is very different.”

Mr. Flaherty's meeting Tuesday was planned weeks ago as part of a lobby day on Parliament Hill for retailers, but the Finance Minister – who has previously called for lower bank fees – used the opportunity as a platform, expanding the time and guests at the meeting with the Retail Council of Canada.

With a report from Reuters News Agency