Headlines: November 28, 2009

Is Dubai the beginning of a new economic crash?

By now everybody knows that the latest piece in the global economic recovery card castle about to start a fall down, is Dubai, which is billions of dollars in debt. On Wednesday, Dubai requested that Dubai World be allowed to skip six months of interest payments on its debt.
According to the latest information, Dubai World, the state-owned largest corporate entity of Dubai, has $59bn of liabilities, which represents a large proportion of the Gulf emirate’s total debt estimated at $80bn. What does it mean? It means that most European banks, admitted or not, are going to be more or less affected by the potential loss.

Dubai accumulated its debt as it expanded in banking and real estate projects before the global financial crisis dried up available financing. With the economic collapse of 2008, the glamorous man-made islands and the fancy, extravagant real-estate lost a big chunk of their original value, leaving Dubai with the huge debt. People are not coming to buy or rent what has been built with a huge profit in mind.

Dubai’s skyline

Dubai has little oil wealth of its own. It acts as the trading, tourist and financial hub of the emirates. It was assumed that the U.A.E.’s richest oil state, Abu-Dhabi, would always bail out its neighbor, and that assumption seemed to have been proven wrong with Wednesday’s announcement.
Is Dubai’s situation shedding some light over what is to come? Meaning another economic collapse? Probably a Dubai default may not provoke a banking crisis, but it could spur a crisis of investor confidence in an economic recovery.

Tiger Woods in a car crash

At 2:25 AM Tiger Woods crashed his car into a fire hydrant and then into a tree. His wife rushed to the scene and smashed the back window of the Cadillac Escalade to help him get out. Or so the story goes.
One may ask: What was he doing at 2 AM driving the car out of the $ 24 million mansion? One possible answer: domestic issue.
Next question: Has his wife smashed the window before or after the crash? Was her smashing actualy caused the crush?
Put the pieces together and the next question pops in mind: Who is the other woman?
Or how the French would say: Cherchez la femme.

According to various tabloids (National Enquire being one), Tiger Woods has been having an affair with a Rachel Uchitel (nightclub hostess), who allegedly exchanged sexually-charged text messages with him and travelled to Melbourne, Australia, to meet him on November 12. A photograph showed her checking into the hotel where he was allegedly staying.

This is the scenario: The tabloids story made Tiger’s wife angry, confronted him, then they got into a fight, she scratched his face (as per TMZ), he left the mansion, jumped in the car, she (Elin) followed and smashed the rear window using two golf clubs.

Rachel Uchitel
Photo courtesy of Daily Mail

Take a look at the picture and be the judge.

Are Extraterrestrials ready to disclose their presence?

Some article I have read some months ago, mentioned the possibility that the defect (should we use the word sabotage?) to the Large Hadron Collider’s system was not a random event, but caused by advanced civilizations from the future to stop us from playing God.
Of course respected scientists dismissed the idea as an utter non sense and accused the two guys who wrote the article of media manipulation.

So, what is to be dismissed? That we try to play God? Or that there are civilizations more advanced than ours?
Just because we can’t prove their existence, it does not mean they are not there. Actually maybe they are keeping a close tab on what we do here on Earth, considering that the ‘Butterfly Effect’ initiated here, by us, may affect their future as well. According to Matthew, extraterrestrials are about to make their grandiose entrance.

Following are abstracts from the latest message
from The Matthew Book.
Read, think, approve, dismiss, whatever suits you the best. But at least try to take into account that maybe, just maybe, there is something more around us than what we see.

“This is an international action and it’s important that there is agreement among the governments involved. Major decisions have been made, but some details are still being discussed. Some of your representatives favor keeping the initial program brief and releasing information in increments so people won’t feel overwhelmed. They propose a brief statement that many spacecraft seen during the past several years are from other civilizations, there’s no reason to think any harm is intended, and more information will follow as it’s compiled. Others want the program to answer all logical questions and some of our representatives tell how they’ve been to helping the planet through what you call the shift or cleansing. Some think it would be frightening to see us as we appear in our native lands—not all of us look like you. Others say it’s necessary to show ourselves as we are to prove that we aren’t from your civilization. Some think including live coverage of a mother ship decloaking is a good idea; others think it could be more threatening than reassuring. “


What kinds of information to present on the program and how much can be covered without overload is being debated. Would it be helpful or overkill to explain that Earth is moving out of her regular orbit by intention and needs our help off and on the planet? Would that involve explaining that Earth is a soul? How much can be said about our technologies without alarming folks about how we might use it? Would it be foolish or comforting to say that our presence has prevented other civilizations from trying to invade Earth? To what extent should the cover-up be disclosed? What about admitting that your governments refused our offers of technology in exchange for ending weaponry development and wars that could annihilate you all? How would it affect your population to know that both dark and light beings from other civilizations have been living among you and influencing your way of life? Should the program include personal accounts of both positive and negative abduction experiences? What to say about the “little grays” that have been living for many years in underground cities? What mixture of scientific, political and religious spokespersons should be in the program?


Hatonn spoke of the formidable opposition to acknowledging the existence of extraterrestrial life. This includes creating fear about the motives of other civilizations, and the dark ones have been doing that through entertainment venues. While it may appear that the television show “V” was strategically planned after initial discussions a year or so back about officially recognizing other civilizations, producing that kind of viewing is just another means whereby seeds of fear have been planted throughout the ages. The same is true of the movie “2012,” designed to evoke fearful thoughts that the world really may come to the kind of end that some fundamentalist religions are expecting. With “entertainment” catering to that belief and refreshing the fear about aliens, not to mention the many other popular entertainment forms based in violence, you can see why all aspects of the announcement program must be so carefully considered.

Fear is the dark ones’ most powerful weapon against the light because the energy of fear not only forms a barrier between the consciousness and the soul; it refuels the darkness to keep it thriving. Another means of achieving that two-way objective as well as reducing the world’s population was developing various strains of “flu” viruses. An important part of this diabolical scheme to create plagues, which during your history have caused massive fear and death tolls, was the conditioning of Earth’s peoples to regard death as the ultimate in fear.


In your galaxy, Earth is one of the best schoolhouses for learning to deal with duality—that’s why you are there. Graduation, so to speak, is mastering duality’s many challenges and evolving into fourth density, where duality doesn’t exist. It may require only a few lifetimes or many hundreds for a soul’s personages to have thoughts, emotions, motives and activities with positive, or light, vibrations rather than those with negative, or dark, vibrations.


Evolving from third density into fourth does not happen simply because you’re on the planet and the planet is ascending. Your evolution comes with heeding conscience and intuition and the other wisdom your soul is giving to guide you in alignment with your contract. It comes with self-introspection, acting with honor, respecting all of Nature’s life forms, discerning truth from falsity, emulating but not copying persons whom you greatly respect, and not judging others. It comes with recognizing and feeling grateful for the blessings in your life, with forgiving yourself and others for perceived injustices. It comes with living from your heart, the seat of your soul.


Yet not everyone will choose to embrace this energy because it entails opening minds to many truths, and paramount among them is the Oneness of All, the inseparability of all souls with God and Creator. Please do not be saddened if persons very dear to you cannot “see the light,” and please do not feel it is your responsibility to urge them. Everyone will awaken in his or her own timing—if not in this lifetime, then in another with the same opportunities to grow spiritually. At whatever station you and souls you love may be, eternal love bonds forever unite you—life is eternal, the soul is immortal!”

How to choose good gold miners?

Now that the stock market is approaching the end of the year, meaning that time when the fund managers and private investors are trying to solve the tax issues, getting position in good securities, especially for a newbie like myself, is even more complicated than before.

Let’s start by saying that I do not believe in any market/economy recovery. Not yet. More and more jobs are lost and I really don’t see the light at the end of the tunnel. We are told that it’s all right and that soon it will be better. In the mean time governments spend money they don’t have, so smart people started thinking that all the paper issued recently is totally worthless and it’s probably better to invest money in gold. But how to choose good gold miners?

Following are abstracts from the article Investment checklist for precious metals

Naturally, the starting-point in looking at the quality of any mining company is the quality and quantity of ore in their property(s). The quality or “grade” of the ore will go a long way in telling us about the profitability of a miner (or the potential profitability of an exploration company).
For gold miners, the starting point would be to look at ore with 1 gram of gold per ton of ore. That’s right, ore with as little as 1 gram/ton is potentially rich enough to support commercial mining. Of course, with this low level of concentration of gold, it will generally require both vast tonnages and favorable geology for ore of such a low grade to support commercial mining operations. Generally speaking, what exploration companies are looking for is ore with several grams of gold per ton.


Much of this information is revealed to us in the drilling samples which mining companies extract and analyze. A drilling core sample is a vertical cross-section of the ore which ideally is perpendicular to the vein in question – so that the sample represents a “true width” of the particular vein. Since veins of ore can exist at various angles relative to the surface, and can also bend and twist through the Earth’s crust, it can be very challenging for the miners doing this drilling to produce such ideal core samples.


Assuming this is the case, when you examine the drilling results of a mining company, the data is generally presented as a series of “intervals” in each core sample, with each “intercept” representing a separate vein of gold. Thus, the drill samples will tell miners (and investors) the grade of the ore, the thickness of veins, and the number of veins – over the total depth of the drilling sample. This means that an ideal core sample would demonstrate high grades (i.e. averaging several grams per ton), thick veins, and (hopefully) many such veins. Since these intervals can be very thick, in some cases exceeding 100 feet, the grades within veins can vary considerably. Where the concentrations are unequal, the person evaluating the core sample will generally also list sub-intervals within the intercept – and indicate the especially rich segments of such intervals.


While veins of gold are relatively narrow, the length of these veins can run for miles beneath the Earth’s surface. Some of the world’s largest/oldest mines end up as vast labyrinths of tunnels occupying areas of many square miles. As a result, even more important than the data which is obtained vertically through each individual drill-sample are the number of such drill-holes produced in a drilling program.
It is the accumulation of dozens (and often hundreds) of drilling samples which map out the dimensions of any given ore-body. Obviously, if such holes are placed closer together, the data obtained is more precise. However, with drilling being a very expensive process, there is a large economic incentive for companies to space-out the holes quite widely (at first) to gauge the overall dimensions of an ore-body. Then subsequently once those dimensions are identified, companies will “fill in the gaps” with more drilling within this perimeter – in order to provide geologists with enough data for a “resource estimate.”


For potential investors viewing the results of such drilling, there are two indicators which they typically look for. First (and most obviously), they want to see most if not all of the drill-holes showing significant levels of mineralization (i.e. several grams of gold per ton in each intercept). Of nearly equal importance, investors want to see evidence of even greater mineralization. Specifically, they will look to see if the drilling reports that mineralization is “open” (i.e. it continues beyond the scope of the original drilling).


Since exploration companies generally have no sources of revenue, being efficient (and a little lucky) with their drilling can and does determine which of these companies will survive and thrive, and which will struggle to stay afloat or simply fold.
Once a drilling program has identified a body of ore with the potential to support a commercial mining operation, this is only the starting point of analysis. A “feasibility” study must be done to evaluate a number of other factors (a more preliminary form of this analysis is called a “scoping study.”)
Sulphides and oxides
Ore containing gold falls into two categories of chemical/geological composition: sulphide-based ores and oxide-based ores. Gold “oxides” are preferable for mining since the chemical “bond” which locks the gold to other chemical elements is not as strong. As a result, processing such ore is cheaper, easier, and generally yields a higher “recovery” rate than with gold sulphides.
The “recovery rate” is self-explanatory. It is the percentage of gold contained in a given quantity of ore which is successfully extracted, and ready for further processing (and ultimately refining into bullion). In simple gold oxides, a recovery-rate above 90% is not unusual. However, because gold oxides contain gold that is cheaper and easier to extract, most of the world’s easily accessible gold oxide deposits have already been mined – meaning that modern miners are forced to obtain much more of their gold in sulphide-based bodies of ore.
With gold sulphides, the much tighter chemical bond between the gold and other elements is much more technically challenging. Attempting to extract the gold using the same methods of extraction as with gold oxides would result in vastly inferior recovery-rates – closer to 50% recovery. Primitive methods of secondary processing of such ore were developed, which improved recovery rates, but resulted in vast quantities of highly-toxic waste.
Unless such “tailings” were collected and contained very carefully, the result was generally environmental devastation. Such primitive gold-sulphide mining operations have been among the worst “offenders” when it comes to mining-based pollution. Fortunately, modern technology has devised new methods for extracting gold from sulphide deposits – which are not only much more environmentally “friendly” but also yield higher recovery-rates.


Up to now, I have been discussing hypothetical bodies of ore with the unstated assumption that they only contain one commercially valuable mineral. In fact, most bodies or ore which contain gold or silver will generally contain one or more other mineral elements with commercial value.

These “byproducts” will add additional complications to the processing of ore, although modern metallurgy has progressed to the point where these problems are nothing more than minor considerations. Typically what occurs is that the metallurgist will seek to maximize the recovery-rate of the primary metal (gold or silver) with secondary processing yielding lower recovery-levels for the other metals contained.
Naturally, these byproducts will offset the production costs of the primary metal, through the “credits”obtained by selling these other metals. This lowers the production costs for each ounce of gold/silver (the “cash costs;”) however, it also dilutes the “purity” of the miner.
For example, a gold miner which obtains 25% of its revenues from copper also contained in the ore, or a silver miner which also produces large amounts of lead and zinc (both very common scenarios) are no longer the “pure plays” which are favored by investors. Such companies generally receive inferior valuations relative to revenues/profitability, and also are affected by price-changes for these other metals.

Is it too late to invest in gold? how high could it go?

From Telegraph.co.uk

If you are debating with yourself to get a gold security position or not, here are some thoughts of analysts taken from around the globe.

Suki Cooper, commodities analyst, Barclays Capital

Ms Cooper said: “We expect prices to maintain their upward momentum through to at least the first half of 2010, where we expect prices to average $1,140 in the second quarter. The unexpected purchase of gold by the Reserve Bank of India has only added to the positive sentiment towards gold. Even though gold’s attributes have not changed, we have seen a change in attitude from investors towards gold. From the official sector through to retail investors, there has been a structural shift in the demand side.”

Jim Rogers, chairman of Singapore-based Rogers Holdings
Mr Rogers argues that gold hasn’t begun to peak, adding that it will climb from a nominal record near $1,100 an ounce to $2,000 an ounce in the future. He said: “Just to get back to the old high back in 1980, adjusted for inflation, the price would need to be over $2,000 now. So we’ll certainly get there some time in the next decade.”
London Bullion Market Association
A poll of about 370 delegates at the London Bullion Market Association’s annual conference predicted that gold would be at $1,181 in 12 months’ time. The poll covered 368 traders, analysts, miners and central bankers.

Ellison Chu, Standard Bank Asia
The Hong Kong based manager of precious metals at the bank expects the price of gold to maintain four-figure levels given the strong demand, particularly from Asia.
“India’s purchase [India’s central bank recently bought 200 tonnes of gold] had a psychological impact on investors. They think other central banks will also buy gold for their reserves. Gold will probably hang on to these high levels. We’re seeing good seasonal demand ahead of Christmas and the Chinese New Year.”

Nouriel Roubini, professor of economics at New York University’s Stern School of Business
In an interview with Hard Assets Investor, Mr Roubini said there were only two scenarios that would see gold go much higher: inflation and Armageddon.
“We don’t have Armageddon, we don’t have inflation, so gold can maybe go slightly higher. But those people who delude themselves that gold can go to $1,500 or $2,000 are just talking nonsense. The fundamentals are not justified, and those people are just talking their books.”

David Levenstein, investment adviser

Writing on Mineweb, David Levenstein, a veteran of 29 years in futures, equities, forex and bullion, said gold appeared to be on course for a shift to $1,300 because of the gloomy outlook for the dollar.
“Frankly, I cannot see any bit of news that may suddenly appear that could have a miraculously powerful effect on the value of the dollar,” he wrote. “While my experience has taught me that it is very difficult to predict future prices, all the empirical evidence tends to indicate that we can expect much higher prices for gold.”

Bill Downey, investor and price analyst
“Cycles suggest we are nearing a pullback. We have arrived at a key resistance area at a time when key cycles are due. We’re modifying key resistance to $1,105-$1,110 followed by $1,132-$1,150. The potential for a high to be established this week and an autumn correction unfolding thereafter has grown significantly. We want to see at least a bit of price weakness first … but longs [those who hold gold] should be cautious.”

Now that you have every scenario covered, I guess the next step is to really look around you and make some notes: what is the unemployment rate? how many new jobs are listed in papers or websites? how many are bogus? how many people are in a store buying staff not related to food?

All these questions could somehow shed some light on the real situation of the economy. Knowing that gold is pretty much related to the dollar strength, which in turn is dependent on a strong economy, move accordingly and invest or not in gold.

Gold drops as US Dollar rebounds

Courtesy of Bloomberg, I have just found out that gold dropped in Asia, getting set for a pull back maybe, before another round up.

The article follows:
” Nov. 10 (Bloomberg) — Gold declined for the first time in three days in Asia as the dollar rebounded and some investors sold the metal to lock in gains after its rally to a record.

Spot gold hit a peak of $1,111.20 an ounce yesterday, lifting its 14-day relative strength index, a gauge of whether a commodity is poised to decline or gain, to more than 70, a level viewed by some investors as a signal of an impending retreat.

“Gold holds a tendency to trade near round numbers, August was around $950, September near $1,000, and October near $1,050, before resolving higher,” Barclays Capital strategists led by Jordan Kotick, wrote in a note e-mailed today. “We expect the market to trade around $1,100 for a few days before a run at $1,150 into month-end.”

Immediate delivery bullion fell as much as 0.5 percent to $1,098.60 an ounce, and traded at $1,099 at 1:53 p.m. Singapore time. December-delivery gold on the Comex division of the New York Mercantile Exchange fell as much as 0.3 percent to $1,098.50 an ounce after yesterday reaching a record $1,111.70.

“Gold is looking a little overbought at the moment and we might see a little correction before the buying momentum takes it higher again,” said He Ruiyan, head of research at Xiamen International Trade Futures Co.

The dollar rose against a basket of six major currencies including the euro and yen as investors moved before a U.S. public holiday tomorrow to pare back bets the greenback will slide. Still, gold is up 25 percent this year, heading for a ninth annual gain, the longest winning streak since at least 1948, as the dollar index tumbled 7.6 percent.

G-20 Announcement

“The key issue is the dollar but if you look at the G-20 announcement, you could make a point that it’s not just the dollar, it’s actually the yen, the euro and the dollar which are looking very weak versus the rest of the world,” Juerg Kiener, chief investment officer at Swiss Asia Capital Ltd., said in a Bloomberg Television interview today.

The Group of 20 governments agreed over the weekend to keep stimulus measures and remained silent on the greenback’s decline this year, fueled by record low U.S. interest rates.

Among other precious metals for immediate delivery, silver slid 0.9 percent to $17.4250 an ounce, platinum fell 0.4 percent to $1,353 an ounce, while palladium declined 0.7 percent to $331.50 an ounce as of 1:57 p.m. in Singapore. ”

Interesting to be noted is the next level, estimated to reach $1,150 by the end of November.
I have on my watch list two securities: Centamin Egypt (CEE.TO) and West Timmins (WTM.TO). Considering that Wednesday is Remembrance Day and the TSX will be closed, I would wait until Thursday to see how the game unfolds.