Friday, November 16, 2012


IAMGOLD Corp. (IAG), Quicksilver Resources Inc. (KWK), Cheniere Energy Partners LP (CQP), Delphi Energy Corp. (DEE), Alliant Energy (LNT), The Mosaic Company (MOS), National-Oilwell Varco, Inc. (NOV), Seadrill Ltd (SDRL), China Petroleum and Chemical (SNP) and Targa Resources Investments Inc. (TRGP) were upgraded by analysts.

Barclays Capital upgraded Cheniere Energy Partners L P (CQP) from an "Equal Weight" rating to an "Overweight" rating. They have a price target of $25.00 on the company.

Canaccord Genuity upgraded Delphi Energy Corp. (DEE) from a "Sell" rating to a "Speculative Buy" rating.

BMO Capital Markets upgraded IAMGOLD Corp. (IAG) from a "Market Perform" rating to an "Outperform" rating.

Macquarie upgraded Quicksilver Resources (KWK) from an "Underperform" rating to a "Neutral" rating. They have a price target of $2.50 on the company.

Ladenburg Thalmann upgraded Alliant Energy (LNT) from a "Neutral" rating to a "Buy" rating.

Standpoint Research upgraded The Mosaic Company (MOS) from a "Hold" rating to a "Buy" rating.

Standpoint Research upgraded National-Oilwell Varco, Inc. (NOV) from a "Hold" rating to a "Buy" rating. They have a price target of $82.00 on the company.

Credit Suisse upgraded Seadrill Ltd (SDRL) from a "Neutral" rating to an "Outperform" rating. They have a price target of $48.00 on the company.

Citigroup (NYSE: C) upgraded China Petroleum and Chemical (SNP) from a "Neutral" rating to a "Buy" rating.

UBS AG upgraded STMicroelectronics (STM) from a "Sell" rating to a "Neutral" rating.

Tudor Pickering upgraded Targa Resources Investments Inc. (TRGP) from a "Hold" rating to a "Buy" rating.

Tuesday, November 13, 2012

Peter Schiff: Fiscal Cliff Part of Solution

In a recent article by Peter Schiff, he makes the case for the fiscal cliff not being a problem we face, but rather a part of the solution to the economic crisis facing America.

According to Schiff, politicians need to design a cliff that " actually large enough to restore fiscal balance before a real disaster occurs."

He sees the probable disaster being enormous, saying, "That disaster will take the form of a dollar and/or sovereign debt crisis that will make this fiscal cliff look like an ant hill."

Schiff blasts Obama for his disingenuous plan for dealing with the fiscal cliff, which will do nothing to mend the economy.

All Obama can do is do the politically correct and acceptable raising of taxes on those Americans making over $250,000 a year. He claims that no one making under that amount will pay more in taxes.

What's wrong with this, other than the huge percentage of taxes already paid by the upper 2 percent of earners, which as of 2008 was 43.6 percent of all taxes paid? It would only bring about $30 to $40 billion annually into government coffers.

That's like someone giving someone that needs to pay $800 in rent, but can't, a couple of bucks to handle the situation. It's all smoke and mirrors to make it look like Obama is actually doing something. He isn't.

Schiff points out that even if the government were to tax them twice as much, it would only cut about a third of the deficit. That also assumes there would be no slowdown in the economy as a result of the taxes. Again, this is a political move, not a real attempt to deal with the economic crisis America faces, which must deal with slashing spending in a meaningful manner.

In other words, we need to go through some pain because the promises made by the government are unsustainable. As Schiff says, if it isn't dealt with now, kicking the can down the road will only make the cliff higher and deeper, which will result in extraordinary circumstances that are in general predictable, but as to the depth of the forced cuts in spending, will hammer those who have become dependent on government instead of taking care of their own wants and needs.

Schiff also points out that the fiscal cliff, in and of itself, is a good thing. The government would be forced to spend less while taxes would pay more for its operations. That, after all, is what must and will be done, whether it's intentionally done or forced upon them by reality.

In the end, if the fiscal cliff were to go forward, the federal budget deficit would be slashed by almost half of the current $1.1 trillion spent in 2012 to about $641 billion.

As usual, politicians and the clueless financial and business media thinks somehow this is a negative outcome. No it isn't. It's exactly what's needed ... and more.

Schiff concludes with this:

It is amazing that members of Congress can keep a straight face as they claim to want to address our long-term deficit problem while simultaneously working to avoid any substantive action. No doubt an agreement will be reached that will replace the looming fiscal cliff with another one farther down the road (which they can easily dismantle before we actually reach the precipice). Will the rating agencies buy this bill of goods a second time? If we lack the political courage to go over this fiscal cliff, why should anyone think we will be able to stomach going over the next one? Especially since each time we delay going over the cliff, we simply increase its future size, making it that much harder to actually go over it.

And this doesn't even begin to deal with the over $220 trillion in unfunded liabilities the nation faces.

As for the idea the weak politicians now in power have an ounce of political courage is laughable. They will bring the country down around all of our heads because they place their own jobs ahead of the health and economic survival of America.

One way or the other a day or reckoning will come. A ponzi scheme like that built by the alliance between the Federal Reserve and the U.S. government will end badly for most people. Anyone affected by this needs to build a strategy based upon this being the end-game of the process we're in the midst of going through. It will happen.

Marc Faber on Equities Losing 20 Percent of Value

Marc Faber reiterated his position on stocks in 2013 in an interview with CNBC on its Squawk Box show, saying he expects equities to lose 20 percent of their value next year.

He added that the so-called fiscal cliff issue isn't even part of his consideration and reason for making his assertion.

"I don't think markets are going down because of Greece, I don't think markets are going down because of the "fiscal cliff" - because there won't be a 'fiscal cliff,'" Faber said.

Instead, Faber gives this as the reason stocks will get hammered:

"The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view."

Faber rightly notes that what America and the world has needed to do is go through a period of pain in order for the economic system to correct.

He said, "There will be pain and there will be very substantial pain. The question is do we take less pain now through austerity or risk a complete collapse of society in five to ten years' time?"

"In a democracy, they're not going to take the pain, they're going to kick down the problems and they're going to get bigger and bigger."

That's the problem of course. Selfish politician only looking to retain their jobs won't touch the cutting back of spending because it immediately sets a special interest group against them.

Of course politicians created these groups of zombies in order to buy votes. Now they're stuck with them, self-forced to wait until an economic collapse forces real spending cuts and smaller government.

As Faber says, waiting until this happens will be more devastating to people, and it would have been better for some short-term pain in order to clean the system out.

I think the whole global financial system will have to be reset and it won't be reset by central bankers but by imploding markets....

Faber is correct. There is nobody in the world that really knows how long it'll take to play out. The pieces are in motion, and with no political will to solve the problem, they will reach their inevitable end.

Our investments and lives need to be ordered accordingly.

Friday, November 9, 2012

Aurizon (AZK) (CXO) (LNV) (MPC) (NSU) (NVA) (PSX) (TALV) (TC) (TET) Downgraded by Analysts

Aurizon Mines Ltd.(USA) (AZK), Concho Resources Inc. (CXO), Longview Oil Corp. (LNV), Marathon Petroleum (MPC), Nevsun Resources (NSU), Nuvista Energy (NVA), Phillips 66 (PSX), Talvivaara Mining Co. (TALV), Thompson Creek Metals (TC) and Trilogy Energy (TET) were downgraded by analysts.

Desjardins downgraded Aurizon Mines Ltd.(USA) (AZK) from a "Buy" rating to a "Hold" rating.

Iberia Capital downgraded Concho Resources Inc. (CXO) from a "Sector Perform" rating to an "Underperform" rating. They have a price target of $71.00 on the company.

Scotia Capital downgraded Longview Oil Corp. (LNV) from an "Outperform" rating to a "Sector Perform" rating. They have a price target of $8.50 on the company.

Deutsche Bank downgraded Marathon Petroleum (MPC) from a "Buy" rating to a "Hold" rating.

GMP Securities downgraded Nevsun Resources (NSU) from a "Buy" rating to a "Hold" rating.

TD Securities downgraded Nuvista Energy (NVA) from a "Buy" rating to a "Hold" rating. They have a price target of $6.00 on the company.

Deutsche Bank downgraded Phillips 66 (PSX) from a "Buy" rating to a "Hold" rating.

Nordea Equity Research downgraded Talvivaara Mining Co (TALV) to a "Sell" rating. They have a price target of $1.91 on the company.

UBS AG downgraded Thompson Creek Metals Co Inc (TC) from a "Buy" rating to a "Neutral" rating.

Scotia Capital downgraded Trilogy Energy (TET) from an "Outperform" rating to a "Sector Perform" rating. They have a price target of $33.00 on the company.

Kinross (KGC) (CPE) (CXO) (ETP) (HFC) (MRO) Upgraded by Analysts

Kinross Gold Corp (KGC), Callon Petroleum Company (CPE), Concho Resources Inc. (CXO), Energy Transfer (ETP), HollyFrontier Corp (HFC) and Marathon Oil Co. (MRO) were upgraded by analysts.

SunTrust upgraded Callon Petroleum Company (CPE) from a "Neutral" rating to a "Buy" rating.
Goldman Sachs upgraded Concho Resources Inc. (CXO) from a "Neutral" rating to a "Buy" rating. They have a price target of $111.00 on the company.

Morgan Stanley upgraded Energy Transfer (ETP) from an "Underweight" rating to an "Equal Weight" rating. They have a price target of $50.00 on the company.

Barclays Capital upgraded HollyFrontier Corp (HFC) from an "Equal Weight" rating to an "Overweight" rating. They have a price target of $65.00 on the company.

Macquarie upgraded Kinross Gold Corp (KGC) from a "Neutral" rating to an "Outperform" rating.

JPMorgan Chase upgraded Marathon Oil Co. (MRO) from a "Neutral" rating to an "Overweight" rating. They have a price target of $35.00 on the company.

Gold's Safe Haven Status Back in Play

In the short term the market knew that if Mitt Romney had been elected president the price of gold and silver would probably have went through a temporary drop, based on the actions of what a President Romney would have done.

On the other hand, the market also factored in a win by Barack Obama would be good for gold and silver, with expectations being Obama would continue to implement the same failed policies he did the first four years of his Presidency.

That has born out well so far, as the price of gold continues to rise immediately after the election, although there are other factors coming in to play.

The most significant is the safe haven play, which has grown as the presidential race played out.

No matter what is done going forward, there is little desire in Washington for politicians to take the needed steps to deal with the economic disaster and the policies that have been behind the cause of it, including an unfettered Federal Reserve that sees only printing more money as the answer to economic weakness.

This is happening in light of a stronger U.S. dollar, which suggests investors understand it's a faux strength, and not one that is inherent to the currency. The only reason it still is perceived by some as a safe place to park their money is that other major economies also have had their central banks throw money at the problem as well, resulting in the currencies moving down in value together, giving the impression of things going on as usual.

But the move in gold price confirms that a growing number of investors know that this is the case, and gold will continue to rise in response to that reality over time.

Continually in the background is also the ongoing sovereign debt crisis and Europe and the march of the region into recession; which is ensured now.

All of this would be enough to push gold and silver prices up, but we haven't even seen significant, official inflation yet, and once that kicks in, all bets are off as to how high the price of gold and silver will go. It's only a matter of when, not if that happens.

Finally, China and other Asian countries appear to be buying up a lot of gold, offering price support to the precious metal, and over time, if China is bolstering its gold supply for the purposes of acquiring other commodities in the future, this will add even more strength to gold, driving up the price even further.

The VIX, which measures the fear factor, has also been rising recently, confirming there is more fear in the market than there has been, providing more incentive to place capital in gold.

Hubbartt: Silver About to Take Off

The price of silver has plunged from $49.82 an ounce in the early part of 2011 to just over $32 an ounce today. That price weakness makes it a very good time to enter the silver market, as indicators point to a robust rally in the precious metal.

According to Morris Hubbartt of 321gold, he sees the market as oversold at this time.

Hubbartt says the CCI and RSI indicators are pointing to strong buy signals for silver, and the Aroon indicator is positioned to confirm a new upward silver price trend is about to break out.

Add to this the macroeconomic factor of money printing from the Federal Reserve and other central banks in major economies around the world, and you have almost a perfect storm for silver and gold at this time.

Hubbartt believes the price of silver will soar to about $44 an ounce by as early as January, 2013. If that's the case, now is definitely the time to invest before it becomes a game of running after the price.

Thursday, November 8, 2012

Adjustments Announced for Rogers International Commodity Index (RICI)

In a press released Wednesday, November 7, Jim Rogers and Beeland Interests, Inc. announced it was making a couple of adjustments to the Rogers International Commodity Index (RICI).

The press released said this:

The RICI Committee has decided to replace ICE Coffee (2.0% Index Weight) with NYSE Liffe Coffee. In addition, ICE Cocoa (1.0% Index Weight) will be replaced by NYSE Liffe Cocoa. The addition of NYSE Liffe Cocoa, traded in GBP, will add that currency to the Index. These changes will be implemented during the January 2013 roll period, occurring at the end of January 2013.

According to the press release, RICI, which was created in 1997-1998, has jumped by 266 percent since in inception of the Index, and as of the end of October 2012.

Rogers is one of the foremost and most well-known commodity investors in the world.

EU Private Sector Faltering

The recent announcements by a number of corporations participating in the EU concerning slashing tens of thousands of jobs, underscores the reality that the private sector continues to struggle, even as governments had hoped they would help turn the region around.

Among those recently announcing jobs being slashed are UBS (UBS), which said it'll be be getting rid of a massive 10,000 jobs - which has already begun. Other major employers cutting thousands of jobs (aggregately) are ING (ING), Kloeckner, Ericsson (ERIC) and Bombardier.

A growing number of economists believe the next couple of years in Europe will see jobless rates jump to even worse levels than they stand at now. We probably won't know until around the summer months because these current layoffs won't affect data until about six to nine months after the layoffs are implemented.

The major problem in Europe is that governments have finally started to shrink a little, causing bloated staffs to be laid off, but at a rate that the private sector can't keep up with.

Of course it was never a reality that outrageous government debt and spending could be compensated for by the private sector after years of abuse, fraud, and unsustainable promises and practices.

People in some countries don't even think in terms of the private sector as a legitimate work environment because they've been brainwashed into believing government is the great healer of nations. Most are finding out too late that that is a fallacy, and since the private sectors of nations were weakened by these outlooks and effects, it's impossible in a short period of time to rectify all the mistakes that have been made, even if they wanted to.

It has taken far too long for governments in the EU to shrink, and they're no paying for that ongoing irresponsible mindset, as austerity is forced upon the nations of Europe, with a private sector not robust enough to absorb the people being released from work.

The good news is over time this will be positive for the private sector as workers and the rest of the people realize that governments can't provide for them in the ways that were promised. It's productivity that results in prosperity, not artificially created government jobs that provide ridiculous benefits the productive are asked to shoulder. Those days are thankfully coming to an end, as are outrageous union demands.

Because Europe has played far too long with countries that long ago should have decreased the size of government, now the forced austerity is pressuring private companies who must operate under actual market conditions, and not the illusory markets created by governments throwing debt-induced money around while being enabled by central banks and failing Keynesian policies.

Yet some foolish economists continue to say things like there must be growth in the "public" or private sector if some of the nations in the EU are to stay in it. What about limited government and downsizing don't these quacks understand? It's inevitable. These governments and their debt coming from endless spending and programs are through. In a relatively short period of time what they were before the sovereign debt crisis will no longer exist.

There will be governments still in place of course, but the bloated monstrosities they have become will gradually be shrunk down in size to the benefit of everyone but the parasites that used them to their advantage.

In the months ahead we'll see growing pressure in Greece, and probably Spain and others in the eurozone to start thinking in terms of abandoning the euro for their own currencies. That would result in some short-term pain, but over the long haul it would be the best for all countries in the region, as well as the rest of the world.

But if nations continuing to use their central banks as a rich uncle not willing to rein in a spoiled kid's spending don't change, this will extend across the globe, as the United States is hanging on by a thread, and with over $220 trillion in unfunded liabilities facing the nation, and China having taken up some bad Keynesian money creation habits, it may be only time before pressure rises on all of them.

Leeb Sees China Implementing Gold Standard

In what would be an extraordinary event if it happens, Stephen Leeb said he believes China is working towards implementing a gold standard to back up the renminbi or yuan.

Leeb said this in an interview with King World News, "China wants gold so they can continue with their plans. They want their currency backed up in gold and they are going to continue to buy it. So gold may weaken, but if it does people should buy it. Once gold starts taking out the all-important $1,800 level, you are not going to have a chance to get into the market. It will not let you in."

As to whether or not China goes on a gold standard or not really won't have an impact on the price of gold, as it'll go up whether China does or not, as the country will continue to buy as part of its economic and financial strategy.

I don't mean by that a gold standard wouldn't boost the price of gold, just that China will buy up gold with or without a gold standard, and that's one element concerning the price of gold that a lot of investors and the media aren't talking a lot about.

Most are focusing on how the money created out of thin air by major central banks around the world will impact gold prices, and silver as well; which is of course of major importance too.

According to Leeb, China has boosted its acquisition of gold by three-fold over the last year, and it doesn't appear to have had any effect on the market at this time. Sometime it will, as news gets out about the demand factor of gold in that regard.

Assumptions are China is bolstering its gold reserves in order to use it to acquire much needed commodities over the years ahead.

Some wrongly believe that China has reached some type of peak concerning building the infrastructure of the country, but it's really only taking a breather, and most likely we'll see them reallocate assets to building out its infrastructure rather than creating cities with few people residing in them.

Leeb gave this advice concerning investing in gold: “My advice is if we get a dip in gold, I would buy that dip.  Gold has a lot of support.  I think long-term and that’s a bet that I’m always willing to make.  I haven’t sold a single ounce of gold or a single share of a gold stock.  That is because I am positioning and I am thinking about the long-term."

Interestingly, we haven't really seen much in the way of "official" inflation at this time. Once that kicks in, along with stimulus and Asian demand, gold will rise to unprecedented levels.

Silver is one of the few assets he sees will come close to rivaling gold going forward. He didn't mention much about demand and it being an alternative to many investors who are being priced out of the gold market, as he commented on the possibility of governments stepping in and not allowing people to buy it any more.

“Having said all of this, if there is one investment that can possibly rival gold, it’s silver.  People don’t realize this, but at some point governments may say to their people, ‘We need the silver and you have to stop buying it.’  When that point comes, silver is likely to be at $150 to $200.  So there is still a lot of room in the silver market.”

Other than China and other Asian markets acquiring gold, the reasons gold will go up are the same reasons silver will, and silver has a much larger demand from the industrial sector versus gold, but is considered secondary as a form or protection and an alternative currency than gold is.

A number of commodity investors see silver outperforming gold over the next decade, but I think that will depend largely upon how much demand Asia has.

Tuesday, November 6, 2012

Rio (RIO), Turquoise (TRQ) Gets Power at Oyu Tolgoi

Rio Tinto (NYSE: RIO) and partner Turquoise Hill Resources (NYSE: TRQ) had good news to announce Monday as the challenge of obtaining the required power to run the mine was successfully navigated. The partners are now set to begin production on the mine in the early part of 2013.

The agreement put in place is a $6 billion deal with Inner Mongolia Power Corp. The deal was held up by differences between Mongolia and China, where much of the power will be provided from.

In as early as six weeks the first ore from Oyu Tolgoi will be processed by Turquoise Hill Resources. The company confirmed its projections of commercial production beginning sometime in early part of next year.

Goals for Turquoise Hill are to have the Oyu Tolgoi mine in full production by 2018. Estimates are it'll cost from $3 billion to $4 billion for the company to accomplish the task.

Underground mining is expected to start in 2016, after a feasibility study is released by Turquoise Hill in 2013.

Annual production estimates for the mine are for 1.2 billion pounds of copper, 650,000 ounces of gold and 3 million ounces of silver.

Turquoise Hill Resources, which owns the mine with the Mongolian government and Rio Tinto, hold a 66 percent stake in Oyu Tolgoi. Rio is running the operations.

Rio and Turqoise still face some uncertainties as the government has asked for Turquoise Hill to renegotiate the contract in place, something the company at this time has refused to do. Until that is solved, a cloud will of uncertainty will hang over the deal.

Once the uncertainty is removed and commercial production begins, Turquoise Hill Resources, especially, should take off in a major way on its share price. It could be one of the biggest mining success stories for many years, bringing shareholders some major success.

Monday, November 5, 2012

Gold, Silver Purchases on the Rise

According to Bill Haynes, president of CMI Gold & Silver, there has been some major acquisitions of gold and silver by new money over the last month, with much of that coming from the fall in price on Friday, November 2.

From now on, for the most part, any pull back will be considered a buying opportunity for gold and silver, as it won't matter what type of short-term economic data brings to the table, such as the slightly positive news on unemployment Friday that temporarily drove down gold and silver prices.

The good news is even though many of the recent investors are new at the game, they have enough knowledge to know to wait for dips to buy. If it were the general population buying, it would be more disconcerting, as it would suggest we would have to start looking for some bubble conditions going forward. We're not near that level yet, and the price of silver have some way to go before the average investor starts to throw their money at the asset class, which by the time they get in will be far above today's prices.

The reason why it doesn't matter concerning the anemic economic news that is being spun as positive movement forward, is it's all about the sovereign debt problems the major economic nations face, and the refusal of government to put meaningful and honest austerity measures in place to combat the out of control spending of governments.

That means of course that stimulus spending will continue to rise exponentially, and the price of silver and gold will move up with it, as people and institutions look for safe places to put their money and to battle rising inflation.

While silver should outproduce gold over the next decade, one major situation in Asia could cause gold to jump higher than expected in the short term, which is a reference to the low gold reserves held in the general region.

Friday, November 2, 2012

Barrick (ABX) (AAA) (AWC) (OIS) (EPL) (FSLR) (MT) Ratings Changes

Barrick Gold Corp (ABX), ALLANA POTASH CORP (AAA), Alumina Limited (AWC), Oil States International, Inc. (OIS), Energy Partners, Ltd. (EPL), First Solar, Inc. (FSLR) and ArcelorMittal ADR (MT) had ratings on them adjusted by analysts.

Raymond James upgraded ALLANA POTASH CORP (AAA) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $1.25 on the company.

Bank of America (BAC) upgraded Alumina Limited (AWC) from a "Neutral" rating to a "Buy" rating.

Raymond James upgraded Oil States International, Inc. (OIS) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $85.00  on the company.

BMO Capital Markets downgraded Barrick Gold Corp. (ABX) from an "Outperform" rating to a "Market Perform" rating. They have a price target of $46.00 on the company.

Global Hunter Securities downgraded Energy Partners, Ltd. (EPL) from a "Buy" rating to an "Accumulate" rating. They have a price target of $25.00 on the company.

Cantor Fitzgerald downgraded First Solar, Inc. (FSLR) from a "Buy" rating to a "Hold" rating.

Natixis downgraded ArcelorMittal ADR (MT) from a "Buy" rating to a "Neutral" rating.

Tuesday, October 30, 2012

George Lucas Sells Lucasfilm Ltd. to Disney (DIS)

Walt Disney Co. (DIS) announced it will pay $4.05 billion to acquire the production company launched and operated by George Lucas - Lucasfilm Ltd., who is also its chairman.

In a statement, Lucas said, "It's now time for me to pass 'Star Wars' on to a new generation of filmmakers."

Also of importance was the announcement that the Star Wars franchise will continue, with three more episodes scheduled to be released, coming on the heels of the original series, where the third film, which was actually the sixth in the series. At this time it is being called "Episode 7." That is already set to be released sometime in 2015.

After the series finishes up with the 9th episode, Disney said there will be a new movie in the franchise released every two to three years.

This really bolsters Disney's portfolio of franchises, which already includes ESPN, Marvel and Pixar, among others.

Lucasfilm co-chairman Kathleen Kennedy will become the president of the company when it moves under the Disney umbrella, and will report to Walt Disney Studios Chairman Alan Horn.

For the new Star Wars films to be released, Lucas will continue on as a creative consultant.

Greece Poised to Vote on Austerity Measure

Even though the coalition government of Greece can't reach a consensus on required austerity measures from international lenders, putting off the vote for another week, there is no doubt a vote will soon come, as it is expected that some time next week draft legislation will be submitted for a vote.

Finance Minister Yannis Stournaras addressed reporters saying "All of the (draft legislation) will be submitted next week. I think there is no other way to do it."

The main battle among the coalition is between the conservative majority and the leftist representatives.

Greece won't receive any more loans unless an austerity package is passed by its parliament.

The much needed labor reforms associated with the austerity measures are being opposed by the leftist, who say they will vote against the package if they aren't thrown out.

Greece Prime Minister Antonis Samaras said this concerning the chaos he sees as following in there is no agreement in place, "The problem is not whether we (introduce) this measure or that measure. On the contrary: It is what we would do if no agreement is reached and the country is led into chaos."

As usual, the selfish Greek unions are lining up to protest the implementation of another set of austerity measures, being unwilling to make concessions that will be economically forced upon them whether they like it or not.

I'm not primarily talking about politically here, but the market itself will force the moves, as the economic practices of Greece, along with other socialist-influenced countries are unsustainable, and a more robust capitalist system (not crony capitalism) must be released through the governments and unions getting out of way and allowing economic liberty to come forward.

It is likely this is the last chance for Greece, no matter which way the vote goes, which will surely be to submit to the austerity measures required by the international lending community.

More importantly, Greece hasn't been forthright with its promises in the past, and even if they get aid this time around, it would be surprising if it ever happens again if they renege on it and continue on with their reckless spending and lifestyles at the expense of Germany, and to a lesser extent, other euro zone members.

Leftist and socialist political parties in Greece continue to act as if they can do what they want and still have access to international funds. Worse, they are still in denial of the fact the promises they have made and the concessions one have never been sustainable, and now the inherent weakness and failure of all socialist economic ideology and policies are again being revealed as unworkable. That's what this is really all about, and nothing can change the realities, no matter what is asserted or fought over.

The money has run out, and the lifestyles lived by Greeks and others looking to the government as their healer and provider, are finding out to their dismay that socialism and Keynesianism doesn't and can't work over the long term.

That is the reality facing all of Europe and America as well. And the sooner it is dealt with, the quicker the pain will pass and economic health will be the result. But since no one is really addressing the issue, even with a nod towards some austerity (it's a deeply ingrained mindset that is the real problem), in the end, until people change their attitudes towards being "owed" something by government and the productive people in the nations of the world, nothing will change.

Austerity will be voted in by the government of Greece. It's a major question as to whether this time around the austerity measures will be adhered to. Either way, this is just a temporary respite, and inevitably Greece will go bankrupt, with other countries following in its footsteps.

Just like the failed USSR, which capitulated to the inability to implement communism and socialism, all other efforts to do so are also doomed to failure.

It doesn't work, and neither does crony capitalism or fascist government agreements and going to bed with businesses.

The free market is the only answer, and while it'll take decades to do so, it will emerge out of the ashes of government interference, fascism, socialism, and any other attempt to deal with economics and people.

Only people taking voluntary actions to interact with the businesses and people they choose to will cause an economy to survive and thrive - whether local, regional or national - and there will be no answer until that becomes the practice of people around the world.

The other major factor is the abandonment of government as the looked-for entity which is to heal and provide for people, which has led to debt that is impossible to pay off. The U.S. alone has unfunded liabilities of over $220 trillion. Yes the trillion is the correct figure. There is no way that will ever be paid off. A default is coming for the American government, and it's only a matter of what type of default, not if there will be a default.

There is no doubt a number of commodities will benefit from the ongoing debasement of currencies in major economic countries, and over time gold and silver will continue to rise in price, as investors realize the U.S. dollar and most other currencies are extraordinarily flawed.

Some gold and silver miners are set to soar, as are the price of silver and gold, which many will make a lot of money off of in the futures' market, with silver looked upon by many as being the probable best investment over the next decade.

In the end, there continues to be no real political will to tackle the spending and debt problem coming from out of control government, and until the economic conditions force governments to shrink and be much more limited and contracted to what their real purpose is, everything will continue to get worse.

Investors need to be aware of that, and make decisions accordingly.

Friday, October 26, 2012

Whiting (WLL) (OXY) (BVN) (GPOR) (TXG) Ratings Downgrades and Initiations

Whiting Petroleum Co. (WLL), Occidental Petroleum Co. (OXY), Compania de Minas Buenaventura SA (BVN), Gulfport Energy Co. (GPOR) and Torex Gold Resources (TXG) had ratings on them downgraded or initiated.

Macquarie downgraded Occidental Petroleum Co. (OXY) from an "Outperform" rating to a "Neutral" rating.

Iberia Capital downgraded Whiting Petroleum Co. (WLL) from an "Outperform" rating to a "Sector Perform" rating.

Credit Suisse initiated coverage on Compania de Minas Buenaventura SA (BVN). They have a "Neutral" rating on the company.

Credit Suisse initiated coverage on Gulfport Energy Co. (GPOR). They have an "Outperform" rating and a price target of $40.00 on the company.

RBC Capital initiated coverage on Torex Gold Resources (TXG). They have an "Outperform" rating and a price target of $2.50 on the company.

Agnico (AEM) (SMS) (BEN) (CLF) (LUN) (NS) Ratings Adjustments

Agnico-Eagle Mines Limited (AEM), Sims Metal Management Ltd (SMS), Franklin Resources, Inc. (BEN), Cliffs Natural Resources Inc (CLF), Lundin Mining Co. (LUN) and NuStar Energy L.P. (NS) had ratings on them adjusted by analysts.

DA Davidson upgraded Sims Metal Management Ltd (SMS) ) from a "Neutral" rating to a "Buy" rating.

Mackie downgraded Agnico-Eagle Mines Limited (AEM) from a "Buy" rating to a "Hold" rating.

Morgan Stanley (MS) downgraded Franklin Resources, Inc. (BEN) to an "Equal Weight" rating. They have a price target of $146.00 on the company.

Dahlman Rose downgraded Cliffs Natural Resources Inc. (CLF) from a "Buy" rating to a "Hold" rating.

Scotia Capital downgraded Lundin Mining Co. (LUN) from an "Outperform" rating to a "Sector Perform" rating. They have a price target of $7.00 on the company.

Credit Suisse downgraded NuStar Energy L.P. (NS) from an "Outperform" rating to an "Underperform" rating. They have a price target of $44.00 on the company.

Agnico (AEM) (CVE) (HERO) (MPC) (PSX) (RUS) (SCHN) Upgraded by Analysts

Agnico Eagle Mines (AEM), Cenovus Energy Inc (CVE), Hercules Offshore, Inc. (HERO), Marathon
Petroleum (MPC), Phillips 66 (PSX), Russel Metals Inc (RUS) and Schnitzer Steel (SCHN) were
upgraded by analysts.

Barclays Capital upgraded Agnico Eagle Mines (AEM) from an "Underperform" rating to a
"Sector Perform" rating. They have a price target of $69.00 on the company.

Cormark upgraded Cenovus Energy Inc (CVE) from an "Outperform" rating to a "Buy" rating.

Dahlman Rose upgraded Hercules Offshore, Inc. (HERO) from a "Hold" rating to a "Buy" rating. They have a price target of $6.50 on the company. Jefferies Group also upgraded Hercules from a Hold rating to a Buy rating, although they have a price target of $4.50 on the company.

Credit Suisse upgraded Marathon Petroleum (MPC) from a "Neutral" rating to an "Outperform" rating. They have a price target of $75.00 on the company.

Credit Suisse upgraded Phillips 66 (PSX)  from a "Neutral" rating to an "Outperform" rating. They have a price target of $60.00 on the company.

CIBC upgraded Russel Metals (RUS)  from a "Sector Perform" rating to an "Outperform" rating.

DA Davidson upgraded Schnitzer Steel (SCHN) from a "Neutral" rating to a "Buy" rating. They have a price target of $36.00 on the company.

Unemployment in Spain Surpasses 25 Percent - ECB Awaits

The economic news for Spain continues to worsen, as the National Statistics Institute said in Madrid that the unemployment rates has soared past 25 percent, to stand at 25.02 percent. That's up from 24.6 percent in the last quarter.

Projections are the economy of Spain will continue to sputter, with unemployment probably reaching 27 percent in 2014.

Painting a much rosier picture is the Prime Minister Mariano Rajoy, who sees the employment picture improving in 2013, and the Spanish government saying the economy will drop by only 0.5 percent. Economists watching the situation see it contracting by almost 1.5 percent.

This puts even more pressure on Rajoy to apply for the loan aid offered by the ECB, although he asserts he feels no pressure to do so at this time.

According to an analyst with Madrid-based consultant firm Analistas Financieros Internacionales, Sara Balina, she told Bloomberg that the third-quarter wasn't nearly as good as the data suggest, as "they were distorted by a temporary increase in demand before a value- added tax increase and by exports that may suffer from weakening growth in the euro zone.”

Although positioning for time, it's clearly approaching when Spain will have to apply for financial aid, which it is delaying in having to do because of the austerity measures included in the package.

The only question is how far and how long will the politicians in Spain go and wait until they finally do what everyone knows they'll have to do: apply for the aid.

This will result in the price of commodities, especially gold and silver, rising significantly, which along with QE3 from the Federal Reserve in America, will push the price of the precious metals up.

Silver, Gold Await Printing Presses

While there is no doubt the Federal Reserve and other central banks around the world will continue to ramp up the money printing presses, we remain somewhat in a holding pattern, at least in the United States, after Ben Bernanke announced the Fed will buy $40 billion in mortgage-backed securities on a monthly basis indefinitely, with indefinitely measured by the health of the job market, with hints the Fed and Bernanke want to see it at about 5.5 percent.

Even though some business and economic writers and investors have attempted to paint gold and silver has having reached a plateau at this time, with the probability they will fall in price, there is not doubt nothing will stop central banks from feeding the out of control spending habits of governments around the world, and the price of gold and silver will continue to rise over the next 10 years, with gold and silver miners, which currently, for the most part, are enjoying low valuations, will bring investors solid returns, especially for silver investors, where the gold-silver ratio continues to be far higher than historical levels, standing far beyond the usual 16 times ounces of silver it takes to buy an ounce of gold, to weigh in at a hefty 54 times the usual amount it takes to buy an ounce of gold with silver.

That alone will dramatically push up the price of silver, as its historical ratio to gold should have it stand at over $100 an ounce as of this writing.

So in the short term, in spite of the announcements by the Federal Reserve and the ECB to stimulate the respective economies of the United States and the euro zone, they still haven't launched their buying programs, which has temporarily kept the price of silver and gold in holding patterns.

It's apparent in the case of Bernanke that he's waiting to implement QE3 when it is seen as not an attempt to influence the upcoming presidential election. With that soon to end, it won't be much long afterwards when it'll begin, and then silver and gold will jump, and it could even before that as investors begin to price in the effect of the stimulus on precious metals, and the resultant fall in value of the U.S. dollar.

For the European Union, what is causing the holdup there is the temporary decision by Spain to attempt to make it appear they have a chance of not needing the money to bailout its economy. That's a fallacy, and largely based upon the need to make it look like they're fighting to keep their people from having to face forced austerity in order to secure the loans.

But like Germany, it will cave on the borrowing end, just like the German leaders do on the lending end. Spain will accept the loans, and when they do, that will also cause silver and gold to rise in price.

One uncertainty in regard to currencies is the major competitors are all debasing their currencies through stimulus programs of one type or another, so it's unclear whether there will be much in the way of the impact of the fall in the U.S. dollar on gold and silver. In that regard inflation and safety will be the impetus behind the rise in the two precious metals; much more so probably than the weakening of the U.S. dollar. Again, it depends on how the market reacts to and views the impact of QE3 in the U.S., and if it deems it as more dramatically weakening the U.S. dollar against major competing currencies, we could see it push up the price of silver and gold even quicker and further than most think.

Another short-term consideration is the selling off of assets by those making decisions based upon tax strategies. That could push down silver and gold some as investors sell off at foolishly low prices. But there is no doubt the duo will continue to rise, even in the short term, as you simply can't bet against the practices of the Federal Reserve and other central banks, which have placed a floor under the precious metals, and which will soar up from there for years to come.

It's a matter of how to invest in silver and gold, not whether you should.

Finally, it is believed that QE3 could even expand beyond the $40 billion spent monthly as Operation Twist comes to an end. The thought is Bernanke will probably start to buy treasuries again in an attempt to jump start the economy, even though that has repeatedly failed to achieve results.

Gold and silver miners, because of ridiculously low valuations will soar in price as an asset class, with some doing far better than others of course. But the rising price of silver and gold, and the relatively new focus on dividends will be a powerful attractant to investors, who will be able to cash in on both fronts if they invest in the right companies.

Another element to watch is mergers and acquisitions among miners, which will make a lot of money for those that can anticipate where those moves are likely to be.

Of course in the end, gold and silver are first a place of safety and hedge against inflation, so that is the number one priority for those putting money in the precious metals. But with little in the way of growth in equities, they will increasingly be looked at by general investors as places they can also make money over time. That will also push up the price of miners, which will benefit everyone holding positions in them.

The silly talk of a gold or silver bubble is off the table at this time, as the everyday investor has yet to really enter the market in a significant way, and until that happens en masse, there is little we need to be concerned about concerning a bubble.

We will need to watch it closely, but we have yet to see the outrageous bidding up of gold and silver prices, and even when that does happen, which shouldn't be for a while, it can sometimes take several years before the prices stop climbing.

For now, investors way for the printing presses to start up, and when they do, there is nothing in the way to keep the price of gold and silver from jumping in the short- and long-term.

Thursday, October 25, 2012

Currencies and Central Banking

A lot of clueless or dishonest economic writers in the West at times attempt to make a big deal out of how China is "manipulating" their currency by pegging it at a certain level against the U.S. dollar. But the truth is Western nations are doing the same, except they're doing in a stealth mode that the general population doesn't understand.

The best example of that is the United States, Great Britain and the Euro zone, all of whom, via the U.S. Federal Reserve, the Bank of England and the European Central Bank (ECB), employ strategies to manipulate their respective currencies against one another and other currencies to keep the competition from being overly volatile, to the detriment of one currency against another.

That is done simply through inflating the currency, or in other words, through the printing of paper money, or the creating of digital money out of thin air. If one country does it, such as the the United States when the Federal Reserve announced its most recent round of quantitative easing by buying up $40 billion in mortgage-backed securities indefinitely, other countries will do it as well to ensure their currency doesn't become too strong against the U.S. dollar, which would be detrimental to exports in the country or region.

So if one currency gets weaker, the strategic response is to weaken the competing currency in order to order to keep a predictable balance between the currencies.

This is what maddens these dishonest countries concerning China, which is actually much more honest in its currency policy, announcing it right out in the open and pegging it to the up and down movements of the U.S. dollar.

The Japanese, British and nations of the Euro zone do the same thing, only through the mechanism of printing more money, rather than pegging their currencies to the U.S. dollar; the results are the same, but just hidden behind the smokescreen of money creation.

As those in power continue to strive for a one-world government and economic zone, these are the tools used to hide their practical agenda, as few people understand what's really going on and why.

Moves like this continue to strike a dagger into the heart of free markets, as currencies should be allowed to float freely against one another without government and central banking interference. That's where the markets will determine the outcome and response to it, not central planners who believe they can control the economic world.

The point is we must be vigilant and aware of what is happening and why concerning currencies, as they play a major part in any investment decision across a wide spectrum of equities and commodities.

Because central planners always will fail, eventually this will change as one important country or another decides to go their own way in order to protect their own interests. When that happens some of this currency scenario could quickly change. But for now, it appears there are some deals being made behind closed doors to keep some of the volatility out of the currency market.

EnCana (ECA) (LRE) (NFX) (TC) Ratings Changes or Initiations

EnCana Co. (ECA), Lrr Energy L.P. (LRE), Newfield Exploration Co. (NFX) and Thompson Creek Metals Co. Inc. (TC) had ratings initiated or upgraded on them.

BMO Capital Markets upgraded EnCana Co. (ECA) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $28.00 on the company.

Oppenheimer upgraded Lrr Energy L.P. (LRE) from a "Perform" rating to an "Outperform" rating on the company. They have a price target of $24.00 on the company.

Raymond James upgraded Newfield Exploration Co. (NFX) from an "Underperform" rating to a "Market Perform" rating.

BMO Capital Markets initiated coverage on Thompson Creek Metals (TC). They placed a "Market Perform" rating on the company.

Silver Will Outperform Gold Going Forward

Gold and silver will continue to be a safety hedge in regard to inflation and a place of safety, as out-of-control governments continue spending and central banks continue to feed their addiction.

Contrary to any political leader today, with the exception of Ron Paul, there is no will to deal out the medicine that would be needed to halt American and other nations from going off the fiscal cliff.

There are some emerging in the Tea Party movement, but I think there it'll take some years before they are trained enough in economics (assuming they understand the need) to be able to make the right decisions for America over the long term.

They have the instincts right concerning slashing government spending and reducing the size of government, but there still a need for them to learn that the Federal Reserve must be abolished or there will never be an end to the hellish practices that are economically destroying the nation.

The Federal Reserve is the rich uncle enabling the irresponsible child to continue on in their ways. Only cutting him off will do the job, but the rich uncle has basically destroyed the child be making him dependent upon his for sustenance. That's the case today with America and other countries that have given out government promises of economic security and protection, with central banks financing them as the main economic growth engine of these countries.

All of that is falling apart, as evidenced by Europe, and it will spread everywhere that those unsustainable practices are employed.

Now as far as all this relates to gold and silver, gold is primarily the hedge that is used by knowledgeable investors to protect their assets against this government and central bank folly, with silver its weak cousin throughout a lot of history.

While gold will continue to rise up over time, as there will be no real steps taken to stem the tide of government promises. As already has been shown, people will rise up - most times violently - in response to what they have been socialized and trained into believing is their right, when it is no longer available to them, silver will rise up even more.

I say this because historically, the ratio between gold and silver has been at about 16. In other words, it would take sixteen ounces of silver to buy one ounce of gold.

So where gold prices stand today, at about $1,725 an ounce, the price of silver should be at somewhere about $108 an ounce. But it has been hovering around $32 an ounce instead. That makes the gold-silver-ratio about 54 today.

The fact that silver has more than doubled from $15 an ounce three years ago to over $31 an ounce today, points to the fact that investors are seeing the unfolding currency crisis, which only hard assets like gold and silver can protect against.

Historically, the price movement of silver usually soars when a currency crisis emerges, and it will outperform the price of gold. At least that's the usual practice. And while silver hasn't outperformed gold over the last decade, the hefty price movement of gold will keep it from moving up in the way it has over the last ten years, as measured by percentages. Silver, on the other hand, is poised to soar, which will bring it back closer to the historical ratio it has usually enjoyed.

This has happened several times since World War I, and will surely do the same over the next several years, and maybe out as far as a decade. A number of commodity and silver experts see silver as being among the best asset classes to own over the next ten years.

There is no certainty as to when gold will breach the $2,000 an ounce mark, but when it does, and as silver moves towards its historic ratio of 16, we could see silver at $125 an ounce. And as gold prices move higher, silver will ultimately adjust and go upwards with it.

All of this of course assumes the current practices of the central banks and governments continue. There is nothing in the near term that would suggest it will change in any way for years to come. Hi-Ho Silver!

Friday, October 19, 2012

How Far Can Gold Prices Rise? $5,000? More?

We are living in extraordinary times in relationship to the price of gold and its correlation to the quantitative easing programs put into play by major economic global players around the world.

So while the idea of gold soaring to price of $5,000, and possibly even to $10,000, while seemingly outrageous for the uninitiated, could in fact become a reality, dependent upon how economies respond to previously failed stimulus measures, and how those nations deal with the growing amount of debt incurred as a result of creating money out of thin air.

A couple of major factors are the debasement of currencies and how high inflation will rise.

Gold prices will largely move on those two factors, especially when the U.S. dollar and other currencies fall in value and are no longer perceived to be places to safely park one's capital.

The major problem with predicting the price of any asset is usually those who understand where things really are, tend to get overly excitable and project prices reaching certain levels dates which are too short in duration. Afterwards, most investors don't believe the probable numbers because of the many failed short-term predictions. But that doesn't mean the underlying assumptions are false, just that the people making the predictions usually are doing so to garner attention to themselves.

That aside, gold will continue to be in a bull market for some time to come, and bubble status hasn't come close to reaching proportions which could actually be identified as such in any meaningful way. The price of gold,, in other words, isn't close to reaching the top yet, and nowhere near enough casual investors have entered into the gold fray yet to allow speculative investing to push the gold prices up. As a matter of fact, we're not even close to that to use the term "bubble" in relationship to gold prices. It will happen someday of course, but is likely to be years away, as well as a much higher price away.

Even those with a much more conservative bent see gold climbing to $2,000 over the next 12 months or so, and possibly as soon as a few months from now, which could be around the early part of 2013.

With the direct connection between the price of gold and creation of money out of thin air, the current practices of open-ended stimulus by the Federal Reserve - the central bank of America - and the lack of effect on helping the economy, all that's really happening is a growing debt load and rising inflation, with nothing positive in return. That is a extraordinarily positive environment for gold, and as well for silver, and both will benefit over the next decade or so, and possibly much longer, depending on the actions of governments and central banks during that time.

The only reason the U.S. dollar hasn't appeared to totally collapse, is other major economic players and their central banks have taken the same actions, which masks the fall in value of the U.S. dollar, because their currencies are also falling. It's more accurate to measure any currency and its value against gold than other currencies, as they're generally simply moving in lock-step with one another because of similar actions taken by central banks, which negates the fall in value of the U.S. dollar.

All of this is to say there is no political desire or will to stop the creation of funny money, and until and if that happens, or is forced to happen, there is absolutely nothing to keep the price of gold to continue on to new heights.

In the end, we're in totally uncharted territory as far as the amount of money being printed, national debt, and amazingly high unfunded liabilities. In the United States alone unfunded liabilities are over $220 trillion (that's not a typo).

But even with these unprecedented numbers, the underlying elements that push the price of gold up are still in place, and because they're increasing in number, as far as money creation goes, and it's only a matter of time before inflation of major proportions set in, gold prices will continue on their upward trajectory, and while it's impossible to know how high it'll go and how long it will take, we're going to continue to see an amazing story unfold concerning gold, and those riding the trend will continue to see their wealth grow with it.

At this time there is no reason to fear a gold bubble, as it's unlikely we're even in the early stages of one. But there will be a time when it arrives, yet even then history has proven the price of gold can soar for some time before it settles back down to earth. We're not close to being there yet, although there will continue to be corrections, which for now must be considered buying opportunities.

So will gold reach $5,000 or even $10,000. It's totally possible, although there is no way to put a time frame on it. All of this will be determined by central bank actions and government policies. Look to Europe to note that governments have little will to implement austerity policies, even though they must if they are to survive. Each government continues to attempt to kick the can down the road and hope it doesn't stop on their watch. One day it will, and gold and those investing in it will wildly benefit from it; even more so than they have in the past in all likelihood.

We are in uncharted territory will central bank money printing and government debt and obligations around the world, that means the price of gold is also in uncharted territory, and all we can do is follow the actions and trust what we know to be the consequences of the practices of these two entities. Nothing will change gold price movements as they relate to the actions of governments and central banks, and how it has responded in the past will continue to be the same in the future until there is in fact a real gold bubble. We're not there yet.

Silver Prices Headed to the Moon?

While there's no doubt we're in the midst of a bull silver market, some comments by silver analyst and bull Israel Freidman on the web site of Ted Butler goes beyond reality (I think), and enters into the realm of fantasy, as he makes the assertion the combination of industrial use and investment value in relationship to silver could push the price of silver beyond gold some day.

Making assertions like that are basically useless, as even if that were to happen, it would take so many years that the idea of someone having made it would have long been forgotten, as will the person making it.

Having said that, the underlying premises for why silver prices will rise are worth looking at, as they are surely part of the silver price picture, and need to be taken into account by silver investors.

It's worth pursuing the matter because a number of commodity experts believe that silver may be the best performing asset class over the next decade.

The major argument for silver prices rising in the view of Freidman, which in general is true, is the growing demand by investors, along with the increased number of industrial uses for silver will end up producing a supply shortage in the not too distant future, which is the impetus behind his belief the price of silver could skyrocket to enormous heights, and potentially surpass gold.

Overall, the problem with that Utopian scenario is once the price of silver were to reach those dizzying price heights, and even before, businesses would seek alternative raw materials or methods to produce products requiring silver as a major component.

That would also be the case for investors, who are now loading up on silver because of it being an effective alternative to gold. Once the prices were to rise too high, the falling demand would bring them closer to reality.

Even so, we should see the ratio between gold and silver improve over what it's been, which means silver prices should rise higher in relationship to gold over the next ten years or so.

As for demand outpacing supply, in the short term that's highly doubtful, and there may even be an abundance of silver in that regard. Over the years though, it could definitely be a possibility that silver supply could come under pressure, and that could move the price of silver up to previously unheard of levels, but not to anywhere near where gold would be, unless the price of gold were to plummet to levels it stood at a little over a decade ago.

The other important factor on the investment side is how long central banks around the world continue to attempt to stimulate their respective economies. If that continues over time, that would result in significant inflation, and in investors moving their money into gold and silver to protect their assets.

This will be especially true as currencies lose their buying power.

At this time investors are still looking to the U.S. dollar as a safe haven, which has helped keep the dollar at levels far above its actual value. That's because other currencies are performing at similar levels, because central bank practices of competing currencies are kept them from being at any significant advantage against the U.S. dollar.

That will change, but that's why some investors continue to be long the U.S. dollar, as they know in this tumultuous economic climate that people and institutions will continue to pour money into the dollar as a perceived safety net. They're wrong, but in the short term that will underpin the dollar.

This will gradually change in regard to silver, and the white metal will continue to rise over time, in spite of those that seem to live to only make money by trying to short the commodity. Over time they'll lose, but those moving in and out of the market, and who know what they're doing, do make a lot of money on the wide prices movements associated with silver, and that will continue even as silver continues to rise in price.

What is good about the boost in industrial usage and demand for silver is it will, over time, place a base under the price of silver as it becomes more predictable as a result.

So the wide movement in prices over the short term may slow in the degree they move, although the relatively small amount of silver in comparison to gold will keep those prices moving much more than its counterpart.

In other words, silver will continue to rise, but the fluctuation in price will continue on unless some unknown hoard of silver is discovered which may change the supply picture over the long term. If not, things will largely remain the same as market factors continue to favor silver and those investing in it.

Diamond (DO) (CQP) (LNT) (ACMP) (HOC) (NR) (GEL) (MGEE) (QRE) (RTI) Ratings Changes and Initiations

Diamond Offshore Drilling, Inc. (DO), Cheniere Energy Partners L P (CQP), Alliant Energy Corporporation (LNT), Access Midstream Partners LP (ACMP), Hochschild Mining (HOC), Newpark Resources, Inc. (NR), Genesis Energy, L.P. (GEL), MGE Energy Inc. (MGEE), QR Energy LP (QRE) and RTI International Metals, Inc. (RTI) had ratings on them adjusted by analysts or initiated.

Credit Suisse (CS) upgraded Cheniere Energy Partners L P (CQP) from a "Neutral" rating to an "Outperform" rating.

Wunderlich upgraded Alliant Energy Corporation (LNT) from a "Hold" rating to a "Buy" rating. They have a price target of $50.00 on the company.

Credit Suisse downgraded Access Midstream Partners LP (ACMP) from an "Outperform" rating to a "Neutral" rating.

Iberia Capital downgraded Diamond Offshore Drilling, Inc. (DO) from an "Outperform" rating to a "Sector Perform" rating.

Fox-Davies Capital downgraded Hochschild Mining (HOC) to a "Sell" rating.

BB&T (BBT) downgraded Newpark Resources, Inc. (NR) from a "Buy" rating to a "Hold" rating.

Barclays Capital initiated coverage on Genesis Energy, L.P. (GEL). They have an "Overweight" rating on the company.

Gabelli initiated coverage on MGE Energy Inc. (MGEE). They have a "Hold" rating on the company.

Credit Suisse initiated coverage on QR Energy LP (QRE). They have a "Neutral" rating on the company.

Bank of America (BAC) initiated coverage on RTI International Metals, Inc. (RTI). They have a "Buy" rating on the company.

Parets Likes Natural Gas, Coal, Over Crude

Saying crude oil at this time "is a mess," J.C. Parets said in regard to energy and commodities in general, investors need to look elsewhere for gains, as he sees the fall from $100 as a trend that is likely to continue at this time.

Parets, who is the founder of Eagle Bay Capital, sees the energy place to be as natural gas, and says coal is also worth a look, as it could move up on the sails of natural gas.

He said, "If we're right on natural gas and continue to see higher prices, I think we should continue to see higher prices for coal as well."

The trend that needs to be followed at this time in the sector is natural gas versus oil, not crude oil in and of itself.

The reason natural gas is so appealing to Parets is it continues to be way below its historic 10-year average in relationship to oil, which has been about 10-to-1. In the spring of 2012 it jumped to 54-to-1.

Thursday, October 18, 2012

Linn (LINE) (EVEP) (KOS) (LGCY) (LRE) (MMR) (QRE) Ratings Initiations

Linn Energy, LLC (LINE), EV Energy (EVEP), Kosmos Energy Ltd (KOS), Legacy Reserves (LGCY), Lrr Energy L.P. (LRE), McMoRan Exploration (MMR) and QR Energy LP (QRE) had ratings on them initiated by analysts.

Stifel Nicolaus initiated coverage on EV Energy (EVEP). They placed a "Buy" rating and a price target of $85.00 on the company.

Guggenheim initiated coverage on Kosmos Energy Ltd (KOS). They placed a "Buy" rating on the company.

Stifel Nicolaus initiated coverage on Legacy Reserves (LGCY). They placed a "Buy" rating and a price target of $33.00 on the company.

Stifel Nicolaus initiated coverage on Linn Energy, LLC (LINE). They placed a "Buy" rating and a price target of $48.00 on the company.

Stifel Nicolaus initiated coverage on Lrr Energy L.P. (LRE). They placed a "Hold" rating on the company.

Guggenheim initiated coverage on McMoRan Exploration (MMR). They placed a "Buy" rating on the company.

Stifel Nicolaus initiated coverage on QR Energy LP (QRE). They placed a "Buy" rating and a price target of $23.00 on the company.

Yamana (AUY) (COP) (EXC) (WNR) (GORO) (HAL) (IAG) (RDS-A) Ratings Changes

Yamana Gold (AUY), ConocoPhillips (COP), Exelon Co. (EXC), Western Refining, Inc. (WNR), Gold Resource Co. (GORO), Halliburton (HAL), IAMGOLD Corp (IAG) and Royal Dutch Shell (RDS-A) had ratings on them adjusted by analysts.

Scotia Capital upgraded Yamana Gold (AUY) from a "Sector Perform" rating to an "Outperform" rating.

Goldman Sachs (GS) upgraded ConocoPhillips (COP) from a "Sell" rating to a "Neutral" rating.

Citigroup (C) upgraded Exelon Co. (EXC) from a "Sell" rating to a "Neutral" rating.

Goldman Sachs upgraded Western Refining, Inc. (WNR) from a "Neutral" rating to a "Buy" rating.

Global Hunter Securities downgraded Gold Resource Co. (GORO) from an "Accumulate" rating to a "Neutral" rating. They have a price target of $17.50 on the company.

Global Hunter Securities downgraded Halliburton (HAL) from an "Accumulate" rating to a "Neutral" rating. They have a price target of $38.00 on the company.

Scotia Capital downgraded IAMGOLD Corp (IAG) from an "Outperform" rating to a "Sector Perform" rating.

Goldman Sachs downgraded Royal Dutch Shell (RDS.A) from a "Neutral" rating to a "Sell" rating.

Gold Will Outperform Dow Says Parets

Those who understand currencies and their responses to stimulus measures by central banks, know that it devalues them, as the Federal Reserve has done from its inception in the United States, whereby the U.S. dollar has plummeted over 95 percent in value since 1913.

Inflation is another major factor, which always follows stimulus measures, or as it's called today: quantitative easing.

While those who invest in precious metals like gold and silver know they are the place to be when central banks go crazy with money printing, there is another metric to check for those that may not understand the relationship between gold and the increase of the money supply. And that is the Dow-Gold Ratio, which measures how much it costs gold to buy one share of the Dow.

According to Eagle Bay Capital hedge fund manager J.C. Parets, it is the right time to rediscover this metric, citing the strength of the data since 1999, when the gold bull run began.

At that time it took 44 ounces of gold to acquire 1 share of the Dow Jones Industrial Average. Parets says that in 1980, one ounce of gold would buy 1 share of the DJIA. So from 1980 to 1999, it went from a ration of 1-to-1 to 44.

In 2011 the ration was 6, and at the time of this writing it has risen to 8.

Since 1:1 has been the historic low of the metric, Parets said there is a long way from 8:1 to that low, and believing gold will undoubtedly outperform the Dow, he sees gold to still be a good investment even beyond the obvious impacts of the effect from overstimulating the economy and the resultant price movement of gold.

This is simply another piece of data to use in our arsenal to measure the price movements and probabilities of gold.

Wednesday, October 17, 2012

Vale (VALE) (MUR) (YZC) (NSU) (CMK) (KMP) (CRK) Ratings Changes and Initiations

Vale (VALE), Murphy Oil (MUR), Yanzhou Coal Mining (YZC), Nevsun Resources Ltd (NSU), Cline Mining (CMK), Kinder Morgan Energy Partners LP (KMP) and Comstock Resources (CRK) had analysts change or initiate ratings on them.

Brean Murray upgraded Murphy Oil (MUR) from a "Hold" rating to a "Buy" rating, while Societe Generale downgraded Murphy Oil from a "Buy" rating to a "Hold" rating. They have a price target of $60.00 on the company.

Citigroup (C) downgraded Yanzhou Coal Mining (YZC) from a "Buy" rating to a "Sell" rating.

Zacks downgraded Vale (VALE) from a "Neutral" rating to an "Underperform" rating. They have a price target of $17.00 on the company.

Haywood Securities downgraded Nevsun Resources Ltd (NSU) from an "Outperform" rating to a "Sector Perform" rating.

Dundee Securities downgraded Cline Mining (CMK) from a "Buy" rating to a "Neutral" rating.

Imperial Capital downgraded Kinder Morgan Energy Partners LP (KMP) from a "Buy" rating to a "Sell" rating.

Brean Murray initiated coverage on Comstock Resources (CRK). They placed a "Hold" rating on the company.

Spain Will Tap Aid from ECB

The disingenuous and dishonest assertions by some in the Spanish government that they are thinking about not taking the bailout money from the ECB are ridiculous, as there is no doubt, regardless of the posturing of Spain, that they will keep on going as they are without aid, or take the route of getting a line of credit. Both ideas are ludicrous, and won't fly under the growing pressure from the eurozone for Spain to access the capital.

According to the Spanish government, the company is in the midst of contemplating on the economic direction it wants to go, but this is only for its population, which will resist the expected austerity measures that accompany access to ECB aid.

The idea that Spain will continue to borrow at the high rates it currently is in the bond markets doesn't pass the smell test, and the European Central Bank will surely be given permission to buy bonds in order to lower the borrowing rates of the country.

Those watching the situation don't believe Spain even has several weeks to wait, and its politicians are probably trying to wait until after the elections on this Sunday before caving and tapping into the aid.

Germany, as usual, has also attempted to position itself as against Spain being bailed out, asserting it has no need of one. Angela Merkel will attempt to make it look like she opposes it as well, but like in her past actions, will try to make it look like she valiantly fought against it, right up to the time she gives the go ahead for more bailouts to continue. Again, all of that is so the German people are made to believe she's battling on their behalf, while all the time already knowing and deciding that the bailout will happen for those countries in the eurozone that ask for it.

Investors and those affected by the decisions in the eurozone need to know that the game is completely rigged, and Draghi was telling the truth when he said he's committed to doing whatever it takes to save the euro and the eurozone. There is no question the majority of leaders in the EU agree with him, and support whatever it takes to get it done.

Standard & Poor's downgraded the credit rating of five major Spanish regions Wednesday, including Canary Islands, Andalucia, Aragon, Galicia and Madrid. That puts even more pressure on the country to take aid before investors start to sell of Spanish bonds.

Overall Spanish debt was recently lowered by Standard & Poor's to BBB-, only one step above investment grade ratings. Below that is junk status, which would make it much more expensive for the Spanish government to borrow capital. Bond investors, as mentioned, would flee from their bond holdings if that were to happen, which is a likely probability.

For now, Moody's (MCO) is also keeping its lowest rating on Spanish credit without cutting it down to junk status. It has a Baa3 rating on Spain.

Taking all that into consideration, there is no doubt Spain will get aid from the ECB. The market is simply waiting for that to happen, and when it does, gold and silver prices will get a nice bump.

Jim Rogers: Recession Coming in 2013, 2014

Jim Rogers continues to reiterate his economic outlook going forward, which isn't a pretty one in his estimation, and he's surely right.

In an interview with Breakout, Rogers said about every 4 to 6 years America has gone through contraction and slowdowns since the beginning of the nation, and that isn't likely to change in light of the lack of results from endless simulating from central banks around the world, including the Federal Reserve in the U.S.

"Every four to six years since the beginning of the Republic we have had slowdowns in America," Rogers noted. "It's always happened and it's going to happen again."

Rogers said he sees 2013 and 2014 being difficult years, and recommends investors to plan accordingly.

In the third quarter in the United States, the growth rate was significantly downwardly revised from 1.7 percent to 1.3 percent, signaling things are already slowing down, with little to show that it will change any time soon.

Rogers said, "2013, 2014 you should be very worried and you should prepare yourself."

The global economy also looks weaker than anticipated as the International Monetary Fund (IMF) also downwardly revised its global economic growth numbers from 3.6 percent to 3.3 percent.

Some areas Rogers sees as important to invest in are gold and silver, as well as his main focus now: farmland. He recently invested in farmland in Australia, and continues to look for other farm assets to own.

Along with agriculture, which Rogers sees as being one of the top performers for years ahead because of the need to boost food production; saying that there is no more land being grown while the global population continues to rise.

Because of the turmoil in the markets, Rogers is long some currencies, including the U.S. dollar, which he has called a "flawed" currency in the past.

There he's investing in the U.S. dollar not because he sees it as being strong, but because he knows with the coming turmoil that investors will flock to it because of perceived safety. So he's investing in the U.S. dollar in relationship to the inevitable migration of capital there, which will push the value of it up in the short term in his estimation.

Tuesday, October 16, 2012

Goldcorp (GG) (CAM) (CS) (HAL) (MEI) (SLB) (WFT) Had Ratings on Them Initiated

Goldcorp Inc. (GG), Cameron International Corp (CAM), Capstone Mining Corp. (CS), Halliburton (HAL), Manitok Energy (MEI), Schlumberger (SLB) and Weatherford (WFT) had ratings on them initiated by analysts.
Credit Suisse initiated coverage on Cameron International Corp (CAM). They placed an "Outperform" rating on the company.

BMO Capital Markets initiated coverage on Capstone Mining Corp. (CS) . They placed an "Outperform" rating on the company.

Barclays Capital initiated coverage on Goldcorp Inc. (GG). They placed an "Overweight" rating and price target of $62.00 on the company.

Credit Suisse initiated coverage on Halliburton (HAL). They placed an "Outperform" rating and price target of $44.00 on the company.

Stonecap Securities initiated coverage on Manitok Energy (MEI). They placed an "Outperform" rating and price target of $2.60 on the company.

Credit Suisse initiated coverage on Schlumberger (SLB). They placed a "Neutral" rating and price target of $66.00 on the company.

Credit Suisse initiated coverage on Weatherford (WFT). They placed a "Neutral" rating on the company.

Newmont (NEM) (IAG) (KGC) (EGO) (ABX) (AEM) (AUY) Had Ratings on Them Initiated

Newmont Mining Co. (NEM), IAMGOLD Corp. (IAG), Kinross Gold Corp. (KGC), Eldorado Gold Co. (EGO), Barrick Gold Corp. (ABX), Agnico-Eagle Mines Limited (AEM), Yamana Gold (AUY) had ratings on them initiated by analysts.

Barclays Capital initiated coverage on Newmont Mining Co. (NEM). They placed an "Overweight" rating and price target of $73.00 on the company.

Barclays Capital initiated coverage on IAMGOLD Corp. (IAG). They placed an "Equal Weight" rating and price target of $19.00 on the company.

Barclays Capital initiated coverage on Kinross Gold Corp. (KGC). They placed an "Equal Weight" rating and price target of $13.00 on the company.

Barclays Capital initiated coverage on Eldorado Gold Co. (EGO). They placed an "Equal Weight" rating and price target of $18.00 on the company.

Barclays Capital initiated coverage on Barrick Gold Corp. (ABX). They placed an "Equal WeightThey placed an "Equal Weight" rating and price target of $52.00 on the company.

Barclays Capital initiated coverage on Agnico-Eagle Mines Limited (AEM). They placed an "Equal Weight" rating and price target of $62.00 on the company.

Barclays Capital initiated coverage on Yamana Gold (AUY). They placed an "Overweight" rating and price target of $25.00 on the company.

Denbury (DNR) (GUY) (BNP) (PBKEF) (PDG) (TALV) Ratings Changes

Denbury Resources Inc. (DNR), Guyana Goldfields Inc. (GUY), Bonavista Energy (BNP), Petrobakken Energy LTD A (PBKEF), Prodigy Gold (PDG), Talvivaara Mining Co (TALV) had ratings on them adjusted by analysts.

Susquehanna upgraded Denbury Resources Inc. (DNR) from a "Neutral" rating to a "Positive" rating.

BMO Capital Markets upgraded Guyana Goldfields Inc. (GUY) from a "Market Perform" rating to an "Outperform" rating.

RBC Capital downgraded Bonavista Energy (BNP) from an "Outperform" rating to a "Sector Perform" rating.

Barclays Capital downgraded Petrobakken Energy LTD A (PBKEF) from an "Overweight" rating to an "Equal-Weight" rating.

Haywood Securities downgraded Prodigy Gold (PDG) from an "Outperform" rating to a "Tender" rating.

Swedbank downgraded Talvivaara Mining Co (TALV) to a "Neutral" rating.

Jim Rogers Blasts Bernanke, Fed ... Again

Seeming to have a calling in the area, billionaire commodity expert Jim Rogers continues to go on attack against the Federal Reserve and Ben Bernanke when given the chance, as he sees the practices of both as extremely detrimental to the economy.

He has continuously been an opponent of the policies of the Federal Reserve, not just under Bernanke, but since its inception 1913. He sees the printing of money out of thin air as an economic evil, and he's of course right, when you consider the U.S. dollar has lost over 95 percent of its value since the Fed was created.

As for Bernanke, he considers him as one of the worst of the Fed Chairman there have been, saying he understands nothing about economics, and the Chairman of the Fed has become a political position, and not one that is based upon the needed understand of economics in order to understand what is needed to be done.

Rogers said this of Bernanke: "Mr. Bernanke does not understand anything about currency. He does not understand finance. He does not understand economics. All he understands is money printing; that's the man's whole intellectual career."

Of course the Fed should be shut down, but as long as it's not, it's best that those that at least have a basic understanding of economics and the consequences of printing money from nothing. If not, they will drive the United States in default, which it is already on the road to.

"Unfortunately, most of the heads of the Federal Reserve in United States history have not understood what's going on," added Rogers, "It's a political appointee, and whoever can brown-nose the best gets the job."

With over $220 trillion in unfunded liabilities, and the Federal Reserve being used as a national piggy bank by politicians in order to make promises that will get them re-elected in the short term, it's already past the point of no return, and it's only a matter of when, not if, the U.S. government defaults.

With the printing presses ramped up around the world in major economies, Rogers recommends that investors continue to invest and hold onto gold, even though when the turbulent times come many will wrongly throw their money at the U.S. dollar as a perceived place of safety.

Why Jim Rogers is Long U.S. Dollar

When listening to the wisdom of Jim Rogers over the years, especially as to how the failed policies of the Federal Reserve have debased the U.S. dollar to the point of being valued at over 95 percent less than it was when the Fed was instituted almost 100 years ago, it's surprising to some to hear him say he's long the U.S. dollar.

Rogers continues to be long on gold, but because the U.S. dollar usually goes in the opposite direction, it seems counter intuitive as to the realities connected to the relationship between the U.S. dollar and gold.

Because Rogers believes there will be much more turmoil in the markets going forward, he sees people throwing their money at the U.S. dollar because it is perceived as a place of safety for capital.

But Rogers notes that his being long the dollar has nothing to do with the strength or safety of the dollar, but rather upon the fact that is is perceived to be a place of safety by the vast majority of investors.

So there is no doubt when the chaotic conditions of the market are reflected in the performance thereof, people and institutions will pile into the U.S. dollar, making it appear to be strengthening, even as the failed policies of the Federal Reserve continue to undermine and debase it.

In other words, Rogers is essentially investing in the guaranteed behavior of the stampeding crowd as it relates to the U.S. dollar in uncertain markets, and because of that he can be long gold and the U.S. dollar at the same time, and make money on both.

Friday, October 12, 2012

Copper, Zinc, Nickel, Tin all Drop

Many commodities took a big hit Friday, as copper, zinc, nickel, tin, gold, silver, platinum and palladium were all trending down, with copper, platinum and palladium taking the biggest hits as measured by percentages, and with platinum and palladium, also falling by the most in U.S. dollars.

Copper has been the major story this month regarding commodities, as it plunged to its lowest levels this week in three months, with falling demand for scrap-metal weighed on the base metal. Most of that is from the slowing demand in China, which has been working on slowing down its heated up economy.

For the last three months, discounts for scrap copper plunged by 25 percent. This is a dramatic turn around from September where copper prices got a boost from the implementation of further stimulus in the United States and Europe.

One of the best leading indicators for copper prices is scrap, and demand has been weakening for the last quarter, even with the bump in copper prices for September.

Copper futures fell to about $3.70 a pound on the Comex in New York for December delivery, at just before 1:30 PM EDT. For the week it is down two percent. Copper futures are trading about 40 cents above No. 2 scrap. That's ten cents above the 30 cents discount it traded at against copper in the 3rd quarter.

Credit Suisse (CS) estimates copper production in 2013 to be at 293,000 metric tons, in contrast to the 102,000 ton shortfall in 2012.

On the London Metal Exchange, copper for December delivery was down to $8,130 a ton ($3.69 a pound), a decline of 1.3 percent.

Solar Could Drive Silver Prices Even Higher

To begin with, I'm not in any way a fan of government-subsidized solar, and think it's a terrible idea that any market is interfered with from the government. Having said that, it doesn't take away from the fact that solar energy should continue to grow significantly in the years ahead, and that means silver will get a major industrial boost in demand as a result of that.

Probably the most important story emerging in that regard is the fallout from the Fukushima nuclear facility, which has caused Japan to change more of its energy focus on solar. That means photovoltaic technology, which further means growing demand for silver,  drives up demand because they require about two-thirds of an ounce or 20 grams per each panel.

To generate more demand, even if it's artificial, Japan has offered utility companies a rate boost of three times conventional power if they go with solar. There is no doubt many of them will take the bait and boost solar-generated power in the country.

The point is, whether you agree with this or not, it must be taken into account as part of the overall industrial demand for silver. At this time approximately 11 percent of all industrial demand for silver comes from the solar sector; and that will continue to grow, albeit the ongoing debt crisis in Europe and unsurety about the short-term fate of the economy could cause uncertainty and volatility in silver demand from the sector.

For example, Germany has cut back on subsidies to the industry, and Italy has made overtures the same way. But when reports say over 100 countries are now using solar panels as part of their energy strategy, some will continue to spend while others may fluctuate in their spending.

But the trend will continue to go higher no matter what happens in the short term, and taking into account this growing market as it relates to silver demand is a must for those looking at the overall picture.

To put some perspective on this, CPM Group reports that industrial demand for silver climbed by about 11.2 million ounces in 2011, and that doesn't include the decision by Japan to raise its solar capacity.

In the solar panel industry, silver demand has soared from one million ounces in 2002 to an extraordinary 60 million ounces in 2011. And that doesn't factor in jewelry demand.

And while German silver demand in the solar sector has declined, many other nations, such as the United States, Japan, France and China, among others, has more than made up for it.

Also needed to be taken into account is the estimate by CPM that silver demand in Europe for solar panels will drop in 2012, but again, that doesn't include the initiative from Japan, which should offset that and easily increase the demand factor for the metal.

According to SolarBuzz, by 2020 Japan may have 28GW of solar capacity installed, and by 2030 that could rise to 50GW. That will take an enormous amount of silver to make that happen. In 2011 only about 1.3GW of power was installed in Japan.

The risk in the assumption of much higher silver use in solar panels is the price of silver itself, which is poised to jump to much higher levels on the investment side of the metal, where it is considered a protection against inflation and a place of safety in light of the loose money policies of governments around the world.

But in the short term that won't matter, as it'll take time to change to silver alternatives as manufacturers look to lower prices. In the case of the price of silver soaring, that probably would cause solar panel demand to fall, and of course that would have some effect on the price, although even there it'll take time for more solar panel market penetration before it's a major factor in the already volatile price of silver.

That's the positive about any segment which needs silver for industrial usage, as the more demand there, the more the price of silver is more predictable and consequently less volatile.

What makes silver hard to follow is the fast and growing number of products that use silver as an essential part of its makeup. So following the major demand sectors, as far as the industrial side of the equation is the way to go, and with that in mind, solar could become the fastest-growing single segment of the industrial market, so should be closely watched in how it impacts demand.

Other general areas that generate big industrial silver demand are food packaging, lighting and medicine.

As with everything associated with silver, there will always be more swings in prices because of the precious metal aspect, lower supply, and uncertainty surrounding demand in the short term, especially in a recessionary global environment.

But over the long term, there is no doubt silver could very well be among the top, if not the top performers over the next decade.

EIA Reports Says Energy Bills to Soar this Winter

In more bad news for the Obama administration, which has refused to pursue the rich resources of natural gas and oil in the United States, the Energy Information Administration said due to an expected colder winter, the price of fuel will jump almost 20 percent for those using heating oil as their heating source.

This will be especially true in the Northeast portion of the United States, where most consumers use heating oil. Higher demand will be the major driver of heating oil prices.

For those heating with the less expensive natural gas, prices are still expected to rise an estimate 15 percent.

Adam Sieminski, an administrator from the EIA, said, “it is going to be colder than last year and as a result of that, heating bills are going to be higher.”

“There has been a trend towards warmer weather so if we end up with somewhat above normal temperatures rather than just slightly below, that would reduce fuel oil needs and presumably would lead to better balance in the markets and somewhat lower prices.”

Approximately 80 percent of those using heating oil are located in the northeastern part of the country.

With Obama's faltering economy, this could easily turn even more voters against him at a time when they're hurting the most from higher energy costs.

EnCana (ECA) (EMR) (FE) (NTi) (PXP) (WR) Ratings Initiations

EnCana Co. (ECA), Emerson Electric Co. (EMR), FirstEnergy Corp. (FE), Northern Tier Energy (NTi), Plains Exploration & Production Company (PXP) and Westar Energy, Inc. (WR) had ratings on them initiated by analysts.

National Bank initiated coverage on EnCana Co. (ECA). They have a "Sector Perform" rating and price target of $23.00 on the company.

Deutsche Bank initiated coverage on Emerson Electric Co. (EMR). They have a "Hold" rating and price target of $53.00 on the company.  

Goldman Sachs initiated coverage on FirstEnergy Corp. (FE). They have a "Neutral" rating and price target of $44.00 on the company.

Deutsche Bank (DB) initiated coverage on Northern Tier Energy (NTi). They have a "Buy" rating and price target of $25.00 on the company.  

BMO Capital Markets initiated coverage on Plains Exploration & Production Company (PXP). They have a "Outperform" rating and price target of $45.00 on the company.  

Ladenburg Thalmann initiated coverage on Westar Energy, Inc. (WR). They have a "Neutral" rating and price target of $31.50 on the company.