Monday, December 21, 2009
Sunday, December 20, 2009
Equedia Weekly What the Fed Doesn't Want You to Know
Back on November 15, 2009, we issued a featured report on a silver company that was trading at $0.32.
Since that time, the Company's share value has climbed to a high of $0.50 (currently trading at $0.495). Not only that, the streams of news from them has been nothing short of impressive. More on that in a bit.
Over this last year, we have been discussing topics related to the devaluing of the US Dollar and why we expect precious metals to outperform in the long-term. (see A New World Currency? What the US Goverment Doesn't Want You to Know")
But this topic brings along with it a lot of financial practices that many are still not familiar with yet. So to end the year off, let's go over the realities of how our financial system works.
Every day we hear about the US printing more money; that this will lead to inflation. But this isn't exactly what's happening.
The US Doesn't Print Money. It Borrows it.
Although in its simplest form this is true, we need to remember the US doesn`t actually print the money on its own printing press. It borrows it. And lots of it.
It's no secret the United States has decided to tackle their economic problems and crumbling banking system by throwing trillions of dollars at it. Just two weeks ago, in our newsletter titled, "The Impressive News Release," US debt sat at roughly $12,080,600,000.
At the time of this writing, its already higher than $12,138,000,000.
It's no wonder the former U.S. Federal Reserve Chairman Alan Greenspan has called for politicians to put party differences aside and formulate a joint plan to tackle the debt this week. The economic guru warned that the country faced an unprecedented 'fiscal crisis' because of the record red ink from America's debt mountain.
To service this debt, the US must pay hundreds of billions of dollars every year on interest alone. For the 2009 fiscal year, the US will have paid over $383 billion dollars in interest.
To make matters worse, this debt is expected to spike dramatically as the Obama administration attempts to reform health care and social security.
But they're not finished.
Remember TARP? There's been a lot of talk regarding the banks repaying their TARP funds which should lead us to believe it will lessen the debt load. But Treasury Secretary Timothy Geithner has decided to extend the TARP program until next October - it was supposed to have ended at the end of this year.
Shortly after that, the US House passed a $154 billion economic-aid package (of which half will be funded by the remaining TARP funds) and added a $290 billion increase in the legal limit on government borrowing.
As the US administration is clearly demonstrating, they are not done spending. Not even close.
But where does all this money come from? How and where does the US borrow all this money from?
The Golden Question
The money comes from many different places.
Mutual funds. Foreign governments. Individual investors. Pension funds. Hedge funds. But more importantly, The Federal Reserve.
Before we get into that, we know that China is one of the largest foreign government holders of US debt and the largest foreign holder of US dollar. Fed chairman Ben Bernanke recently stated that China will likely continue to buy US debt because their currency is so strongly tied to the Greenback. But that's the reason why China so very much wants to diversify their incremental reserves into Euros, Yen, other currencies, plus assets such as gold:
"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets" - Cheng Siwei, former vice-chairman of the Standing Committee.
As we stated in past newsletters, this suggests that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction. Yet another reason why we remain bullish on gold in the long term.
Now back to the Federal Reserve.
The Federal Reserve
First of all, we need to understand that the Federal Reserve is NOT owned by the US government. It is a private bank created, owned, and controlled by the richest well-known families in the world (although their board of governors says otherwise) to ensure their families will remain rich forever.
And they are doing a fine job at that.
The Biggest Lender
The Federal Reserve is one of the biggest lenders to US' insatiable appetite for borrowing. This past March, they printed $1.2 trillion and lent it to the US.
The US will not default on payments of their loans - that we know.
This means anyone who is lending the US money, will make a sure-fire bet on their return. Think about how much money the Federal Reserve will be making alone on their $1.2 trillion loan that's guaranteed to be repaid? And guess what? It costs them nothing. Zilch. All they do is print it. There's no such thing as a FED audit.
So while the same private bankers who control the world's financial systems continue to lend the US money, the average US citizen will be busy paying back the interest on those loans.
The Rich Get Richer, and the Poor Get Poorer
Wouldn't it be nice if we could print some money and lend it to the US? Obviously, we can't. Most of us do not belong to the banking families that control the world's wealth.
And we certaintly do not recommend trying to beat or expose their monetary policies and activities because they are an extremely powerful group you do not want to mess with.
The truth is, there is nothing we can do about it. Except for one thing.
Invest in precious metals
The smart money knows what's really going on. It's the reason they have been pouring their funds into precious metals-backed assets such as silver and gold. It's the only valuable asset that remains tangible.
That's why we remain bullish on precious metal plays and why we have been featuring nothing but precious metal juniors.
Two Signicant Announcements
This past week, our featured silver company Silvermex Resources (TSX-V: SMR) made three significant announcements.
They announced that Michael Callahan has now become the new President and Arthur Brown, effective January 1, 2010 will be the new Chairman of the Board.
To put this into perspective, let's take a look at their credentials.
Michael Callahan
Mr. Callahan served as Vice President of Hecla Mining Co. (NYSE: HL) and President of Hecla's Venezuelan Operations from 2006 to 2009. He served as Vice President, Corporate Development from 2002 to 2006. He served as President of Minera Hecla Venezolana, a subsidiary of Hecla Mining Co., from 2000 to 2003. Mr. Callahan joined Hecla Mining Co. in 1989 and held a variety of positions including Director, Accounting & Information Services and Senior Financial Analyst before being named Vice President. From 1997 to 1999, he served as Financial Manager of Silver Valley Resources.
Arthur Brown
Arthur Brown, retired in 2006 as Chairman of Hecla Mining Company (NYSE: HL), headquartered in Coeur d'Alene, Idaho. During his 39 year tenure at Hecla, he held several senior operating positions within the Company, he became President of Hecla in 1986 and was named Chairman and Chief Executive Officer in 1987. He graduated from Witwatersrand Technical College, South Africa, as a mining engineer in 1961. Following his graduation, he worked at Cementation Co. in Canada until 1967, when he began his career with Hecla Mining Company as an industrial engineer. Mr. Brown serves as a director on the boards of AMCOL International Corporation (NYSE: ACO) and Idaho Independent Bank. He is a former Director of the National Mining Association and served as a Director of The Gold Institute and The Silver Institute (Past President). He is past president of the Idaho Mining Association. He is also a Trustee for the University of Montana Foundation (Past Chairman). He is a member of the audit and compensation committees of Amcol International.
Why would Arthur Brown, ex-Chairman and CEO of Hecla Mining, want to become Chairman of this relatively unknown silver junior?
We'll let you be the judge of that.
One of the reasons we selected Silvermex Resources (TSX-V: SMR) as a featured company (aside from their properties and recent acquisitions) was the new group of directors they acquired with top executives from two of the world's foremost silver producers: Silver Standard and Hecla Mining.
In addition to the management additions, they released on Friday some underground sampling assays with highlights including 2m of 41.0 g/t Gold, 123.0 g/t Silver and 6.4% Base Metals. Take a look at the news release by clicking here.
With their new team in place and recent acquistion, we are looking forward to what Silvermex Resources (TSX-V: SMR) has in store for us next year.
Friday, December 18, 2009
Agoracom Newletter Might Have A Pick For You
mber 18, 2009 - friday SPOTLIGHT
New Dawn's Turk Mine Produces 1,130 ounces or 35.2 kg's of Gold in November 2009
BREAKING NEWS – Dec 16, 2009
- Gold production for November 2009 was 1,130 ounces or 35.2 kg's, as compared to gold production for October 2009 of 1,235 ounces or 38.4 kg's
- Gold sales for November 2009 were US$1,367,000 at an average gold price of US$1,138 per ounce
- At November 2009 month-end, an additional 500 ounces or 15.5 kg's of gold were awaiting export for sale in South Africa, which will be included in December 2009 sales
Exobox Releases New Version 1.6 of ExoDetect(TM)
Exobox Technologies Corp. EXBX: OTCBB
BREAKING NEWS - December 17, 2009
- Newest version of ExoDetect(TM) further expands the capabilities of the industry's first SaaS-based Data Leak Detection technology
- Version 1.6 of ExoDetect(TM) makes several key new features available including the capability to automatically schedule scans with stronger filtering capabilities
- Scheduling scans to run automatically on a preset basis is essential for customers to stay on top of constant threat of data leaks
Armada Reports Record Results From Retail & Insurance Divisions
BREAKING NEWS - Dec 14, 2009
November 2009 vs 2008 Highlights
- Insurance Services revenue up over 100%
- Retail Services revenue up over 60%
- Aggressive Google campaign continues to drive traffic up over 240%
- Dealer Services revenue up over 120%
- Advertising revenue up over 100%
Garibaldi Resources Corp. GGI: TSX-V
BREAKING NEWS - December 17, 2009
- Commencement of a 1200 m diamond drill program to test the Rembles prospect, one of multiple targets identified on the Company's 100% owned 48,000 hectare Tonichi/Onovas concessions in Sonora State, Mexico
- A total of 8 diamond drill holes are planned using the company's NQ diamond drill rig to test the gold mineralization over the exposed 300 m strike-length
Hudbay Dips On Good News Buying Opportunity
| HudBay Updates Drilling on Copper-Gold Zone at the Lalor Deposit 17:02 EST Thursday, December 17, 2009 |  |
TORONTO, ONTARIO--(Marketwire - Dec. 17, 2009) - HudBay Minerals Inc. ("HudBay", the "company") (TSX:HBM) today announced additional drill results as an update to its September 22, 2009 announcement of the discovery of a Copper-Gold zone at its 100% owned Lalor deposit near its Snow Lake concentrator in the Flin Flon Greenstone Belt.
Notable results intersected in the Copper-Gold zone included DUB263W05, which assayed 9.62 g/t Au, 29.01 g/t Ag, 6.46% Cu, and 0.40% Zn over 30.94 meters from 1261.68 to 1292.62 meters and in drill hole DUB263W03, which assayed 11.75 g/t Au, 35.36 g/t Ag, 5.89% Cu and 0.43% Zn over 32.78 meters from 1253.36 to 1288.14 meters. Please refer to the map entitled "Lalor Cu-Au Zone - Plan View", available on HudBay's web site and at http://media3.marketwire.com/docs/hudbaylalor.pdf for drill hole intersection locations (the "Drill Plan Map").
The Copper-Gold intersection in hole DUB263W05 intersected the 30.94 meters of mineralization approximately 21 meters down plunge to the north from the previously disclosed DUB263W02 (the "Discovery Hole") (13.35 g/t Au, 27.98 g/t Ag, 5.33% Cu and 0.35% Zn over 34.54 meters from 1253.08 to 1287.62 meters). The intended target for this hole was 50 meters down plunge to the north.
The Copper-Gold intersection in hole DUB263W03 was a metallurgical wedge cut located approximately two meters away from the Discovery Hole. In addition to this wedge cut, HudBay has completed six of the nine holes announced in the company's October 8, 2009 news release, including DUB246DPN, DUB249DPN, DUB263W04, DUB263W05, DUB265, and DUB266. Previously completed holes have also had assay results returned, including DUB252, DUB252W02 and DUB263W01.
"We are encouraged by these drill results which demonstrate that the Copper-Gold zone remains open down plunge and we will continue exploration to further define the zone," said W. Warren Holmes, HudBay's executive vice chairman. "A mining contractor has been selected, crews have been mobilized and ramp development is underway with the aims of providing an advanced exploration platform and pre-development opportunities."
The narrow widths and/or low grade results from assays on drill holes DUB252W02, DUB252 and DUB263W01 as shown in Table 1 suggest they define the Copper-Gold zone eastern margin. Drill hole DUB263W04 was intended to test 50 meters down plunge of the Discovery Hole. However, it did not reach its intended target. Assays are pending on this hole and HudBay's management believes it would also limit the extent of the eastern boundary due to the absence of significant visual copper mineralization. Evaluation of gold content is pending assay results.
Hole DUB265 was intended to intersect the Copper-Gold zone at 150 meters down plunge of the Discovery Hole to the north. This hole did not intersect its intended target and drifted to the east. While assays remain pending, no notable visual copper mineralization was observed. However, a Crone borehole electro-magnetic survey taken from DUB265 indicates a strong off-hole conductor approximately 50 to 60 meters to the west, coincident with the original target.
Deflecting the diamond drill hole wedge cuts away from the parent diamond drill hole using directional drilling technology has proven to be successful at Lalor; however at depths greater than 1,000 meters, accurately intersecting proposed targets is more difficult.
The western boundary of the Copper-Gold zone is not as well defined as the east. A narrow zone intersected in DUB249DPN suggests a western limit to the zone. Assay results are pending from DUB246DPN; however no notable copper mineralization was observed. Evaluation of gold content is pending assay results. DUB189, which was previously released on March 3, 2008, may represent a limit of possible extension to the west in the northern portion of the favorable target area as shown on the Drill Plan Map. A Crone borehole electro-magnetic survey is scheduled for this hole to help guide the drilling program.
HudBay currently has two drills operating on the Copper-Gold zone targeting the favorable target area. One drill is targeting the continuity of mineralization between DUB252W01 and the Discovery Hole. The other drill is targeting the down plunge extension of the mineralization 150 meters to the north of the Discovery Hole. Pending the results of this drilling future targets will be assessed. The exploration down plunge to the north and the evaluation of the possibility of other lenses associated with the Copper-Gold zone remain exploration priorities.
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