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.

Peabody (BTU) (CNE) (CNX) (PGH) (TIE) (WLT) Downgraded by Analysts

Peabody Energy Corp. (BTU), Canacol Energy Ltd. (CNE), CONSOL Energy Inc. (CNX), Pengrowth Energy Trust (PGH), Titanium Metals (TIE) and Walter Energy (WLT) were all downgraded by analysts.

Nomura downgraded Peabody Energy Corp. (BTU) from a "Neutral" rating to a "Reduce" rating.  $22.00

CIBC downgraded Canacol Energy Ltd. (CNE) from a "Sector Perform" rating to a "Underperform" rating.
Credit Agricole downgraded CONSOL Energy Inc. (CNX) from an "Outperform" rating to a "Sell" rating.

Credit Suisse (CS) downgraded Pengrowth Energy Trust (PGH) from a "Neutral" rating to an "Underperform" rating.

Citigroup (C) downgraded Titanium Metals (TIE) from a "Buy" rating to a "Neutral" rating. They have a price target of $13.00 on the company.

Credit Agricole downgraded Walter Energy (WLT) from an "Outperform" rating to a "Sell" rating. They have a price target of $30.00 on the company.

Alpha (ANR) (CLR) (ENRC) (OGE) (CMLP) (AAUKY) Ratings

Alpha Natural Resources (ANR), Continental Resources, Inc. (CLR), Eurasian Natural Resources (ENRC), OGE Energy Corp. (OGE), Anglo American plc (AAUKY) and Crestwood Midstream Partners LP (CMLP) had ratings on them adjusted or initiated.

Howard Weil upgraded Continental Resources, Inc. (CLR) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $99.00 on the company.

Barclays Capital initiated coverage on Eurasian Natural Resources (ENRC). They placed an "Equalweight" rating on the company.

Jefferies Group upgraded OGE Energy Corp. (OGE) from a "Hold" rating to a "Buy" rating. $58.50 $63.50

Nomura downgraded Alpha Natural Resources (ANR) from a "Buy" rating to a "Neutral" rating.  $8.00

HSBC downgraded Anglo American plc (AAUKY) from an "Overweight" rating to a "Neutral" rating.

Citigroup (C) initiated coverage on Crestwood Midstream Partners LP (CMLP). They placed a "Neutral" rating and price target of $24.00 on the company.

Thursday, October 11, 2012

Ron Paul: Government a "Giant, Blood-sucking Parasite on Economy"

Economic warrior Ron Paul, who is an enemy of big government, government dependency, and the coming fallout from the promises made by the government which are not sustainable, rightly noted on his congressional website that the government "is a giant, blood-sucking parasite on our otherwise healthy economy."

Even so, Paul says his opposition to government is no longer just about dependency and dignity, but "more about the deceitfulness of government promises."

Consequently, Paul sees Greece as being a bellwether for the United States, as large numbers of Greeks were promised more than the government ever had a realistic chance to deliver, and now that the country is essentially bankrupt, and the programs and entitlements having to be cut back to have any chance to survive, the people are rioting in the streets in response to losing their pampered lifestyle promised by the government.

According to Paul, a number of sources believe if the government of the United States doesn't rein in its spending, that will be where America will be within a decade or so.

It also appears that Congressman Paul considers the debate over entitlements for food, shelter and health care to be over, as it's irrelevant if these continue on unabated, as the entire system will eventually collapse under the weight of the unsustainability of the programs, where he says that "the number of Americans who have significant dependency on government is dangerously high, and I honestly fear for them."

Taking into account welfare, food stamps, Social Security and Medicare, Paul says over 165 million Americans get direct help from the government, which is 53 percent of the population.

Thus the argument on whether or not programs like Social Security and Medicare are a right because people pay into them, according to Paul, is a moot one when the government ultimately defaults or the other possibility - soaring inflation. Both are in effect a default, and those dependent upon government will be hit hard when one or the other, or both happen.

Paul also blasts the recent decision by the Federal Reserve to implement an open-ended stimulus program, which will allow government officials to spend at extraordinary rates, which will drive up the debt even more.

Also getting Paul's wrath was the growing amount of corporate welfare which produces crony capitalism. Paul cites Cato's Tad Dehaven as saying corporate welfare probably accounts for about double of what it costs for social welfare handouts.

When you add the employees of these companies dependent upon government bailouts, contracts and grants, the amount of people that will be devastated by a default are legion.
The answer, according to Ron Paul, is this: 

Government does not create resources when it taxes people and prints money; it merely redistributes the wealth, while supporting a massive, wasteful bureaucracy along the way.  Government is a giant, blood-sucking parasite on our otherwise healthy economy. For too long we have entrusted too much economic power and influence to irresponsible politicians in Washington. It's the chaos that ensues after they run the system into the ground that will be so painful for so many people. But realigning our economy with the free market and away from government mandates and handouts must happen in order for it to thrive again.
The answer is not to keep asking government to do more. The answer is to extricate our economy and ourselves from the grasp of Washington DC as much as possible now, before our dependency becomes our downfall.

I agree 100 percent with him.

IMF's Lagarde Wants Less Austerity

With the need for even more austerity in Europe, along with the abandonment of Keynesianism and socialism, it's pathetic to see IMF Managing Director Christine Lagarde say that the austerity measures European officials are attempting to require in order for nations to receive aid - are "harsh."

The usual ignorance surrounding economics by Lagarde and others is evident in the ongoing idea that actually dealing with the unsustainable debt problem in a practical manner would result in it hurting nations like Greece and Spain, which continue to attempt to extract more money from the eurozone while doing very little to meaningfully cut back on debt and spending.

How does cutting back on government spending present problems for growth? It doesn't if your a market economy and embrace real capitalism (not crony capitalism).

But when the idea that government has a right to interfere in economies is part of the mix, it creates outrageous problems like the sovereign debt crisis now faced by Europe. To think that government spending actually has a positive, long-term effect on any economy is thinking from a day before the fall of the Soviet Union and socialism. To attempt to revive it through out of control government spending is doomed to failure, and calls for anemic austerity measures is a way to allow this failing economic dinosaur to last a little longer, while threatening to take down the eurozone with it.

Lagarde wants to have these irresponsible countries, including Portugal with Greece and Spain, to have another two years to deal with the problems. But since the reality is they have done little but talk austerity as the money keeps pouring into them, all that will do is result in the debt load of the countries climbing even more. The region simply doesn't have people with the courage to take the needed steps that would heal the damage done for the socialist, Keynesian cancer spreading across the eurozone.

No economic radiation or chemotherapy will help the situation, neither will cutting out the source of the cancer. It's too late, as the entire area has been infected with the financial cancer, and the patient will have to allow itself to die before any chance of recovery begins.

That's because there are none who have the will to take the needed steps to ensure a long-term economic health recovery to the countries there.

The idea that austerity measures are a risk rather than a long-term cure only shows the lunatics are running the asylum, and whether anyone takes the needed steps or not, the economic conditions will force them to be taken in one form or another in the not too distant future.

What will come out of that will be the final death of socialism and Keynesianism (other than a few deluded dreamers who will always adhere to the failed theories and systems), which could result in a gravitation towards real free markets and capitalism, which offer the only hope for long-term economic success for the world.

Germany Cuts Growth Estimates in Half

In what could be the precursor to a major blow to the eurozone, German economists lowered their growth estimates in half, cutting them from the previous 2 percent down to 1 percent.

While the German public has little in the way of support for the poorly run countries in the eurozone, Chancellor Angela Merkel continues to go against that sentiment, saying the country needs "to do things to stimulate the European economy."

Merkel continues to look to the failed idea of consumers bailing out Europe. She said to reporters, "If we manage to keep our domestic consumption up, then that has of course the advantage that we can increase imports from other European Union countries."

That's all a smokescreen. Who doesn't know that doing things to help the European economy means throwing money at the irresponsible nations in the eurozone, who are Keynesian and socialist to the core, and are doing nothing to get out of the way so free markets and real capitalism will emerge. That's the only practical answer, and until they takes those steps and put in place even more austerity measures, things will continue to spiral downwards.

Projections for growth in the eurozone for 2013 is an anemic 0.2 percent, according to the International Monetary Fund. In the second quarter growth in the eurozone dropped 0.2 percent, while Germany only grew 0.3 percent for the quarter.

The German economists concluded that German growth faces major challenges if other countries in the eurozone don't take steps to cut back on spending and lower their debt. A recession is likely if things continue on as they are.

The economic report, which comes out twice a year, also lowered its estimates for German growth for 2012, dropping it from 0.9 percent to 0.8 percent.

It's interesting to see these many beggar nations point to austerity making things worse. The fact is the lack of austerity is what brought this outrageous sovereign debt crisis about, and while it will cause some pain, it's overspending and offering more than can be delivered by governments that has the eurozone where it is today.

Many leaders and economists continue to act and believe that government spending is what brings about economic success, as evidenced by the continual calls to spend even more while doing very little to make actual cuts in the debt.

Business is what brings economic strength and success, not governments. And until these corrupt politicians in Europe, and many other areas of the world, stop believing government is the answer to building wealth, things will remain the same, or get much worse.

As for German Chancellor Angela Merkel, she continues to talk tough in the beginning of the next round of throwing money at the problem, but after this false posturing, caves in and backs up continual spending.

Nothing will change that until German voters see what's really happening and how it negatively affects them, and end up voting her and her party out.

Either that or, Merkel finally gets some inner strength and stands against the rest of the eurozone in order to protect her country or people.

But since she is a proponent of a new world order, unless she has an epiphany, nothing will change, and she'll continue to cave in time after time to the foolish practice of providing money to governments who really have no intentions of cutting back on spending, but who hope that the global economy will improve while they keep kicking the can down the road.

In that case the major countries in the region will continue to prop up the failed practices and economic policies of these countries, but it won't be as noticeable to voters because things will appear to have been taken care of.

But Germany doesn't appear strong enough to carry the weight of increasingly socialist Europe, which has an entitlement culture so inbred in them that even when this could bring down the entire eurozone economically, they continue to hang on to these failed theories and practices.

In other words, socialism and entitlements have taken on a religious connotation, and people who believe in the state as almighty, will continue to follow that until their faith in government fails them, and they'll have to start to become responsible for their own lives. It'll take time for that to happen. But happen it will.

3D Bioprinting: Organovo (onvo) Creating Customized Human Tissue

Organovo (onvo), which is traded over the counter, is among the leaders in bioprinting, an offset of 3D printing, where it can generate human tissue, will the ultimate goal of designing human organs for use.

For those unaware of 3D printing itself, that's where a digital model is used using a printer to build 3-dimensional solid objects. It is poised to change the manufacturing industry forever.

The difference between 3D printing and bioprinting is bioprinters use what is identified as "bio-ink" to form human tissue. The bio-ink is made from mixtures of living cells.

Those involved with or following the bioprinting industry say the ability to create organs for the replacement of existing human organs is at minimum a decade away.

While that's the sexy part of the business, from a more near term profitable outlook, it's the building of tissue for the use in research by pharmaceutical companies that the money is at now, and which could be a source of steady income over the long term. Another use is for regenerative therapies.

Similar to 3D printing, the bio-ink used in bioprinting builds tissue in layers.

Concerning regenerative therapies, some companies have used it in wounds, where the cells built from the bioprinting are applied directly to the wound. The results at this time show the wound will heal quicker in response.

Other experimental results from bioprinting are the printing of heart valves, bone implants and knee cartilage at Cornell University.

As for Organovo, it's working hard to provide solutions for drug companies looking to significantly lower time and costs in relationship to testing drugs. The Presidents Council on Science and Technology reported that clinical trials in the biopharmaceutical industry now cost $31.3 billion.

Expectations are the use of 3D printed tissue will allow for companies to find out much earlier in the development process on whether or not a specific drug will work. That means those that are successful would likely come to market much quicker than before.

At this time Organovo works with Pfizer (PFE) and United Therapeutics (UTHR), whereby they share some rights with the companies, along with receiving funding for projects, according to Mike Renard, vice president of commercial operations for Organovo.

Renard added that some of the tissue already printed by the company includes recreated tumors, blood vessels, and lung tissue. Tissue created for customers is proprietary.

If Organovo can move quickly and efficiently into this market and take a fast lead, it could be a major player, which would of course generate fantastic returns for its investors.

BHP (BHP) (EOG) (KEG) (NBL) (PDCE) Downgraded

BHP Billiton (BHP), EOG Resources (EOG), Key Energy (KEG), Noble Energy (NBL) and PDC Energy Inc. (PDCE) were downgraded by analysts.

Canaccord Genuity downgraded BHP Billiton (BHP) from a "Buy" rating to a "Hold" rating.

Tudor Pickering downgraded EOG Resources (EOG) from a "Buy" rating to a "Accumulate" rating.

Howard Weil downgraded Key Energy (KEG) from an "Outperform" rating to a "Market Perform" rating.

Wells Fargo & Co. downgraded Noble Energy (NBL) from an "Outperform" rating to a "Market Perform" rating.

Wells Fargo & Co. downgraded PDC Energy Inc. (PDCE) from an "Outperform" rating to a "Market Perform" rating.

Harmony (HMY) (AEM) (PAL) (SLB) (OIS) Ratings Changes or Initiations

Harmony Gold Mining (HMY), Agnico-Eagle Mines Limited (AEM), North American Palladium Ltd. (PAL), Schlumberger (SLB), Oil States International, Inc. (OIS) had ratings on them upgraded or initiated by analysts.

UBS AG upgraded Agnico-Eagle Mines Limited (AEM) from a "Neutral" rating to a "Buy" rating.
UBS AG upgraded Harmony Gold Mining (HMY) from a "Sell" rating to a "Neutral" rating.

Credit Suisse upgraded North American Palladium Ltd. (PAL) from a "Neutral" rating to a "Outperform" rating. They have a price target of $15.00 on the company.
Howard Weil upgraded Schlumberger (SLB) from an "Outperform" rating to a "Focus Stock" rating.

BMO Capital Markets initiated coverage on Oil States International, Inc. (OIS). They have a "Market Perform" rating and price target of $88.00 on the company.

Wednesday, October 10, 2012

Kinross Gold (KGC) CFO Paul Barry Steps Down

Paul Barry, the CFO of Kinross Gold Corporation (NYSE: KGC), is the latest top executive to leave the company, a couple of months after CEO Tye Burt was replaced by J. Paul Rollinson in August.

The stated reason for leaving was the usual “to pursue other interests,” although it is a surety that it follows on the heels of the reason Burt left, which was to boost margins, lower costs, and better capital efficiency.

Although it's not a certainty it's tied in to this move, today Morgan Stanley (MS) downgraded the miner from an “Equal Weight” rating to an “Underweight” rating.

Even so, most analysts have been more positive on the company, with Deutsche Bank (DB), RBC Capital and TD Securities all looking favorably on the gold miner. Deutsche has a "Buy" rating on Kinross; RBC Capital has an "Outperform" rating on the company; and TD Securities also has a "Buy" rating on them.

As for a new CFO, there has been no candidate named to replace Barry, who evidently announced his exit suddenly, or else Kinross would have had a replacement in place. Kinross says Barry will stay on until a new CFO is found.

U.S. Oil Stockpiles Rise for Second Straight Month

For the second month in a row U.S. oil wholesalers boosted their stockpiles, pushing the benchmark price of oil up past the $93 mark in morning trading.
According to the Commerce Department, oil wholesalers in the United States raised their inventory by 0.5 percent in August, following a 0.6 percent jump in July.  Also significant is the sales of oil wholesalers climbed by the largest margin since February 2012.
The reason for the rise in oil prices in response to the data is usually it signals wholesales believe oil sales will rise in the near term.
Gasoline for the national average in the United States remains at $3.81 a gallon.

Yamana (AUY) (AEM) (ATNAF) (IAG) (LPI) Get Analysts' Initiations

Yamana Gold (AUY), Agnico-Eagle Mines Limited (AEM), Atna Resources (ATNAF), IAMGOLD Corp (IAG) and Laredo Petroleum Holdings Inc. (LPI) had analysts initiate coverage on them.

Morgan Stanley (MS) initiated coverage on Agnico-Eagle Mines Limited (AEM). They placed an "Equal Weight" rating on the company.

Pi Financial initiated coverage on Atna Resources (ATNAF). They placed a "Buy" rating and a price target of $2.60 on the company.

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

Morgan Stanley initiated coverage on IAMGOLD Corp (IAG). They placed an "Equal Weight" rating on the company.

C.K. Cooper initiated coverage on Laredo Petroleum Holdings (LPI). They placed a "Buy" rating and a price target of $28.00 on the company.

Kinross (KGC) (GOLD) (DO) (TC) (TGD) Downgraded by Analysts

Kinross Gold Corp. (KGC), Randgold Resources Ltd. (GOLD), Diamond Offshore Drilling, Inc. (DO), Thompson Creek Metals (TC) and Timmins Gold Corp. (Canada) (TGD) were downgraded by analysts.

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

Canaccord Genuity downgraded Randgold Resources Ltd. (GOLD) from a "Buy" rating to a "Hold" rating.

Morgan Stanley (MS) downgraded Kinross Gold Corp (KGC) from an "Equal Weight" rating to an "Underweight" rating.

Paradigm Capital downgraded Thompson Creek Metals (TC) from a "Buy" rating to a "Hold" rating. They have a price target of $3.00 on the company.

Canaccord Genuity downgraded Timmins Gold Corp. (Canada) (TGD) from a "Hold" rating to a "Sell" rating. They have a price target of $2.35 on the company.

AuRico (AUQ) (CG) (CLR) (D) (NFX) (TGA) (TRGL) Upgraded by Analysts

AuRico Gold (AUQ), Centerra Gold Inc. (CG), Continental Resources, Inc. (CLR), Dominion Resources, Inc. (D), Newfield Exploration Co. (NFX), Transglobe Energy (TGA) and Toreador Resources Co. (TRGL) were upgraded by analysts. Canaccord Genuity upgraded AuRico Gold (AUQ) from a "Hold" rating to a "Buy" rating. They have a price target of $9.50 on the company. Canaccord Genuity upgraded Centerra Gold Inc. (CG) from a "Hold" rating to a "Buy" rating. They have a price target of $16.50 on the company. Capital One upgraded Continental Resources, Inc. (CLR) from a "Neutral" rating to an "Add" rating. They have a price target of $97.00 on the company. Credit Suisse upgraded Dominion Resources, Inc. (D) from a "Neutral" rating to an "Outperform" rating. They have a price target of $59.00 on the company. Tudor Pickering upgraded Newfield Exploration Co. (NFX) from an "Accumulate" rating to a "Buy" rating. Salman Partners upgraded Transglobe Energy (TGA) from a "Hold" rating to a "Speculative Buy" rating. They have a price target of $12.75 on the company. KeyBanc upgraded Toreador Resources Co. (TRGL) from an "Underweight" rating to a "Hold" rating.

Tuesday, October 9, 2012

Greece Won't be Repaying Debt

For those who really understand what's happening in the euro zone, it isn't surprising in light of the visit by German Chancellor Angela Merkel to Greece, that it highlights the fact that Greece won't be repaying its debt anytime soon, which according to the IMF, will climb to an astounding 171 percent of gross domestic product (GDP) in 2012 and 182 percent in 2013. 

The IMF adds that Greece won't be able to pay the five-year debt reduction target that was the foundation behind receiving the $130 billion euro bailout. The original goal of cutting the debt level of the country to 120 percent of GDP by 2020 is now considered an impossibility by the IMF. It says the existing debt will now need to be restructured. Some economists saw this coming even before the bailout was put into effect, and many in Greece continue to demand that the austerity measures required to receive the money be, for the most part, rescinded.

 Talking to CNBC, former deputy minister of economy and finance, Peter Doukas, said, "The Greek debt is not repayable at this point. The economy is too weak to afford a 300 billion euro ($387.9 billion) plus debt." "Perhaps now isn't the best time to talk about it, but very soon we're going to have to talk about rescheduling of Greece's official debt. It simply isn't repayable," Doukas added.

 Doukas concluded, "There's going to be an official debt haircut or restructuring or rescheduling of sorts. My feeling is that it needs to go 15 years further in terms of maturity and a cutting of interest rates by at least 1.5 percent." Personal incomes have plunged by 25 percent in Greece, and unemployment among young people has soared to 55 percent.

 The question now is if Greece can in any way be trusted. The outrageous obsession by some in the euro zone to keep the failing and tenuous region together appears to at this time, be willing to be done at any cost.

But Greece and other economically failing states have exposed the soft underbelly of the agreement, and it's only a matter of time before some of these states are required to take real austerity measures in order to get their loans, or they'll be forced to go back to operating economically using their own currencies.

 At this time the will to save the European Union remains strong, and some leaders will continue to take the misguided and immoral steps to keep it together no matter who it hurts. That can only go on for so long before outrage from the productive workers and markets that are more free than the failing socialists governments weighing on economic Europe, rise up and rebel against those parasitical states that continue to drain the coffers of the region.

 Those wanting to use Europe as the stepping stone for a new world order know this could set them back for many years if it fails now. They are doing everything to ensure it doesn't, but the fallout from those efforts could trigger even more problems than the fall of the EU, euro and euro zone would bring.

At this time is appears it doesn't matter to those attempting to lead this attempt at a global coup.

Alcoa (AA) Earnings, Revenue Plummet YOY

Earnings and revenue for aluminum giant Alcoa (AA) plunged from the same quarter last year, suffering a net loss of $143 million, with revenue falling from $6.42 billion last year to $5.83 billion this year. Earnings dropped from a profit of $172 million last year to a loss of $143 million this year. I'm not sure why the headlines are screaming about the company meeting analysts' expectations, as the expectations were so low it would have been hard to lose in that environment. Analysts had been looking for the company to generate revenue of $5.54 billion, and for earnings to come in even with last year's numbers. CEO Klaus Kleinfeld continues to beat the drum about aluminum demand going to double sometime between 2010 and 2020, but things will have to change drastically for that to happen in the years ahead. Of course there's little place to go up for the price, so if there ever is the beginnings of a real economic recovery, aluminum prices could shoot up, but there are far too many variables and questions concerning the global economy to be able to even suggest that is going to happen in the near future. Again, I'm not sure how these dismal numbers can be called a beat, other than analysts lowered their estimations so much that it was inevitable that Alcoa would surpass them. But at least they were able to. Anything less would have been an even greater disaster for the struggling company. Some of the segments Kleinfeld says grew were in the automotive business in the United States, as well as the aerospace unit. Alcoa closed at $9.13, up by a penny, or 0.11 percent. In after hours trading the company was down $0.10.

December Gold Drops Over $10 an Ounce

Some commodity prices were under pressure Tuesday after a report from the International Monetary Fund revealed it slashed global economic growth for the year from 3.5 percent to 3.3 percent.
Gold for December delivery dropped $10.70 an ounce to settle at $1,765. December silver was down 3.2 cents an ounce to $33.985. January platinum fell $3.50 to settle at $1,695.30 an ounce.
Unsurprisingly, the IMF confirmed the leading economies of the world are at risk of recession, although the reality is we've really never emerged from latest recession, and there has been no recovery.
Those commodities moving up on the day included energy, palladium and wheat. Soybeans fell a penny to $15.50 a bushel. Palladium climbed to $658.20, up $1.25 an ounce.

Concerns over supply because of a slowdown in production in the North Sea and rising tensions in the Middle East were behind the rise in energy prices. Recent fires at a refinery in the U.S and another in Russia has also added price support in some energy segments.
Benchmark crude oil futures climbed $3.06, or 3.4 percent, to settle at $92.39 a barrel in New York. That is the highest level in over a week. Brent crude closed at $114.50, jumping $2.68, or 2.4 percent.

Heating oil increased by 5.89 cents to $3.2032 a gallon, and wholesale gasoline was up 6.56 cents to $2.9587 a gallon. Natural gas was up by 6.4 cents to $3.467 per 1,000 cubic feet.

The Dow Jones Industrial Average plunged 110 points to close at 13,473, a loss of 0.8 percent. The S&P 500 Index dropped to 1,441, losing 14 points or just under 1 percent.

The ICE dollar index climbed to 80.023, up from Monday's 79.595.