Lindsey Williams - FreedomizerRadio - Nov 15, 2011

Pastor Lindsey Williams on FreedomizerRadio to discuss the Elites' plans for 2012. Some Topics: - What in the world is going on? – 2012 Predictions from the Elite – The Dollar, Debt, Fear, Fuel in 2012 – Division among the Elite – Why 2012 and not 2000 – The Devil’s Messiah according to the Elite – Divine Manifestation

Ian Gordon: “$15T US Govt Debt Can Never Be Repaid, Bond Market To Be Attacked Soon”

Tekoa Da Silva of BullMarketThinking.com talks to Ian Gordon of TheLongWaveAnalyst.ca.

Keith Neumeyer: The Silver Market Lacks Integrity

The Hera Research Newsletter (HRN) is pleased to present an incredibly powerful interview with Keith Neumeyer, Chief Executive Officer, President and Director of First Majestic Silver Corp. (TSX:FR / NYSE:AG). Mr. Neumeyer began his career at the Vancouver Stock Exchange and worked in the investment community for 26 years beginning his career in a series of Canadian national brokerage firms including McLeod Young Weir (now Scotia McLeod), then Richardson Greenshields and then Walwyn Stogell McCuthchen (which became Midland Walwyn).

Mr. Neumeyer moved on to work with several publically traded companies in the natural resource and high technology sectors. His roles have included senior management positions and directorships in the areas of finance, business development, strategic planning and corporate restructuring. Mr. Neumeyer, who has listed a number of companies on the Toronto Stock Exchange, has extensive experience dealing with financial, regulatory, legal and accounting issues.

Hera Research Newsletter (HRN): Thank you for joining us today. Let’s begin by talking about silver supply and demand.

Keith Neumeyer: Silver mine production was around 736 million ounces in 2010. Demand was around 1 billion ounces. Scrap silver recycling and some government sales filled the gap. We’re at historic lows in terms of above ground silver. Eric Sprott recently said there are 1 billion ounces of triple nine silver left aboveground. Unlike gold, silver gets used. We’re at historic highs in supply when it comes to gold, but the exact opposite is true for silver.

HRN: Is there a deficit in terms of mine supply?

Keith Neumeyer: We’ve had a supply deficit for the past 13 years. 2009 was the first year we created equilibrium. We only went into a surplus in 2010, in terms of industrial and jewelry fabrication demand. The surplus mine supply was purchased by investors, obviously. A lot of mining companies are showing lower production because a lot of silver comes from base metals and, with lower base metals prices, it’s becoming more difficult. I don’t see any major supply drivers for silver in the next several years.

HRN: Do you expect more scrap silver to enter the market?

Keith Neumeyer: That’s what happened in 2009 when gold rallied over $1,200 and then corrected to below $1,100. It was primarily caused by scrap gold entering the market. I believe the same thing was happening for silver. We’ll see that again as the metals make new highs. It’s the same as a stock. You replace part of the shareholder base at different levels. (more)

Funny Pic of the Day

How To Play $3,000 Gold: ABX, FCX, GDX, GG, GLD, GOLD, NEM, SGOL, TGLDX

The investing world is full of forecasts. Every analyst, investment bank and brokerage house sets forth their opinion to the investing world and tries to gauge the future. In the gold sector, it's no different. Predictions of $5,000 or even $10,000-an-ounce gold are now hitting the press wires. While most of these predictions may turn out to be "too good to be true" (remember Dow 36,000?), it does pay to follow the advice of a few sound managers or analysts who have proven success. One such manager, with a history of outperformance, recently offered his take on the gold sector.

Large Rise in 2012

Guiding his fund to a 26% annual return over the last 10 years, John Hathaway certainly knows his way around the gold markets. The Tocqueville Gold (TGLDX) features a Morningstar four-star rating and has been one of the better performing precious metals funds since its inception in 1998. Hathaway's latest missive on where gold prices could hit in 2012 is enough to make any gold bug happy.

The fund manager believes that continued efforts to stimulate souring economies in both Europe and the United States will push gold prices closer to $3,000 an ounce by the end of 2012. Currently, gold sits around the $1,700 mark. In his report, Hathaway said, "The market reaction to this financial crisis on both sides of the Atlantic is a necessary, but painful, prologue for gold to reach new highs, which we believe could probably be well above $2000 and maybe even $3000." Ultimately, the fund manager believes that more monetary and fiscal stimulus by various governments will equal printing money. The resulting inflation coupled with "breakdown of confidence in paper currencies linked only to political agendas," will serve to support higher gold prices in the future. (For related reading on gold, see The Gold Standard Revisited.)

Hathaway also cites that there is only about $2 trillion worth of investment in gold, or approximately 1% of all global financial assets. This, plus the recent divergence in gold prices versus the stocks of miners, makes those firms that dig the stuff out of the ground increasingly compelling.

Playing Hathaway's Bullish Stance
With a solid track record in the sector, investor's may want to take Hathaway's advice and add some gold exposure to their portfolio. Aside from adding his fund to a portfolio, the SPDR Gold Shares (NYSE:GLD) is still the largest and easiest way to add direct exposure to rising gold prices. However, as the manager says, "If one believes that the current gold price is sustainable, the historically high discount between the shares and the metal represents a compelling opportunity," then a bet on the miners could be in order.

Tocqueville Gold's largest miner holding is in Goldcorp (NYSE:GG). The firm continues to offer one of the lowest costs of production for the precious metal and higher gold prices have translated into higher earnings. The company reported an 88% increase in earnings for the third quarter and recently increased its monthly dividend. Goldcorp currently yields 0.8%.

Higher gold prices should benefit investors in Newmont Mining (NYSE:NEM). Back in April, the firm reported that it would link its dividends to the price of gold to attract investors. Newmont's current yield sits around 2%, but the miner has raised its payment during the last quarters. As higher gold prices persist, investors could be rewarded with continued higher payouts. Additionally, both Barrick Gold (NYSE:ABX) and Freeport-McMoRan (NYSE:FCX) offer strong yields.

The Bottom Line
For investors, honing in on top managers or analysts' forecasts could lead to major profits. In the gold sector, John Hathaway has guided his fund to outstanding results over the last few years. His latest report gives insight into his predictions of $3,000 an ounce gold. Betting on physical prices via the ETFS Physical Swiss Gold Shares (Nasdaq:SGOL) or the previous mining stocks, could be great investments.

Will Gold Be Confiscated? Martin Armstrong

Answering your questions.


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More Thoughts on WTI and Brent Oil Prices

Back in February, I wrote a post called Why are WTI and Brent Prices so Different? In it, I talked about a number of issues, including pipeline issues, contributing to the differential between Brent oil prices (high) and West Texas Intermediate oil prices (low).

Recently, I have had some additional insights into what is happening that I would like to share with others. These include:

1. The WTI / Brent oil price differential has, in fact, led to lower prices on oil products in the United States than the rest of the world, and has helped (at least a little) to keep the United States out of recession.

2. As a corollary to (1), if we can fix the WTI/Brent price differential, it will mean, at least initially, higher prices for oil products for US consumers. It may also cause the US to slide into recession, lowering oil prices for both WTI and Brent.

3. The situation giving rise to the WTI/price differential may be more complex than just lack of pipelines. Part of the issue may be limited refinery capacity to handle the heavier, sourer oils (even though, ironically, neither WTI nor Brent is heavy or sour). If this is the case, even if the WTI /Brent price differential is fixed, heavy sour grades may still trade at a big discount to light sweet grades, so the problem may be transformed to a new problem, not eliminated.

In this post, I will explain these observations.

What is happening to Brent and WTI prices?

The first question we might ask is, “Is Brent price high, or is WTI price low, or is it a combination?” To look at this, I compared both prices to the world average oil price, as calculated by the US Energy Information Administration.

Click here to enlarge

Figure 1. Comparison of WTI, Brent, and world average oil prices, based on EIA data.

The answer seems to be primarily that WTI has fallen relative to world oil prices. Figure 1 shows that during 2010, both WTI and Brent prices tended to be a little higher than the world average oil price. Starting shortly after the beginning of 2011, Brent rose a bit relative to the world oil price–about $1.60 per barrel higher relative to the world oil price, while WTI dropped below the world average oil price. On average, WTI has averaged $15.75 lower than would be expected during 2011, based on 2010 relativities and the average world oil price. (more)