Friday Overview

The Dollar is down 1.3% right now for the day and surprisingly the markets didn't move upward very much. I think this is a sign of at least a short term decoupling of the Dollar from the US exchanges, something thats actually more normal than what we've seen recently. The dollar is under a lot of pressure right now from both our foreign creditors who may be starting to diversify their holdings, and also from within as US investors begin to move their money into the more attractive markets. So I think that the decline of the dollar will continue at least for a short time until we hit the next resistance point.

I also think that the markets are due, as I said previously, for a correction sometime soon which may bring the dollar some support. They traded pretty much sideways today as early gains were chewed up by the later day selling.

Oil Prices were up 3.7% to 69.45 today which is great for anyone that listened to me previously and has been buying into the dips; I'm sure there will be more to come.
The facts shows higher oil prices in the coming years with a declining supply, aging infrastructure, increasing demand from emerging markets, etc. so enjoy the ride it should be a good one.

Anyway, thats my cap for the week, remember to get yourself into a solid Canadian Gold or Silver company if you haven't already. Its going to be a money maker, as well as oil, alternative energy, and other commodities.
Another thing I've been thinking about recently is the world's water supply. Places like China have a horrible fresh water situation, and the demand is only growing with the industrialization and population. I'll post on this in more depth next week.
For now have a great weekend!

Oil Stocks: Get in and Average Down

There are a few reasons I believe the markets will need a correction sometime fairly soon before they continue their long upside trends. First is my gut instinct that tells me nothing ends in months that was created over years. We've seen a major crash in equities since prices peaked in the 4th quarter of 07, and recently an almost equally impressive resurgence in the markets carrying the DOW up a total of 42% since its March lows. It just seems normal for there to be some sort of correction in the market before we continue much higher.
We've had a lot of good news recently with better-than-expected earnings, especially from the banking sector that seemed to help carry the prices higher. However, if you disect the "good news", you'd realize that we're only about half way through the entire real estate crisis, we still have high unemployment numbers coming in every month, we have seriously curbed consumer spending, and we have not many actual revenue increases. The fundamentals haven't improved at all. Most of the profit increases are only due to cost cutting, and the actual increases we do see come from banks like Goldman Sachs and Meryl who have been awarded massive bailout and stimulus injections. They've had billions of dollars that they've been able to leverage and invest in the rising markets to produce these spectacular earnings reports. I just dont think that the "green shoots" are going to hold out forever, just like a drug addict, at some point there must be a withdrawal even if it isn't a total collapse.

Also, at some point the FED is going to have serious pressure to increase the interest rates in order to soak up all of the liquidity, but I just don't see them being able to do it. Just that alone could be enough to cripple the already teetering financial system. However, If they don't raise the rates we'll be looking at creating another serious bubble and ultimately instigating an irreversible inflation cycle.
Their plan is to let the economy stabilize and then hike the rates to soak up the excess liquidity, but I dont know if the government can really afford to pay the rates if they have to.
Whether the Economy recovers or collapses Oil will be a solid investment because either the demand will increase and supply will be short, or the massive liquidity will drive prices up. Commodities in general should be a good place to invest for the coming years as the Asian and other emerging economies continue their development.

My advice is to buy into Oil Stocks now and continue to average down during any weaknesses. The prices will rise long term based on supply and demand imbalances.

Canada for Investments

The Canadian economy has performed especially well compared across the board, even to other commodity rich nations like Australia, South Africa, and Brazil. The government has done an excellent job during these economic hardships taking precautions to not create a serious inflationary situation like many other nations, and that is why the Canadian markets will continue to provide good investing opportunities into the future. If you've read other material from my blog you'll know that it is not only the number of dollars you make that matters, but how the value of those dollars(or other currency) stands against other currencies, and also against the price of gold.
For that reason I continue to invest in the Canadian exchanges; their currency and economy are in good standing when compared to others, especially their American neighbors(thats us) and it will provide shelter to us from a falling dollar.

The world's largest Creditor nations like China, Japan, Tiawan, etc, are all located on the Asian Continent, and collectively they hold the largest stake in the US Bond market. I feel as though this will leave them exposed when the currency crisis does occur because so much of their capital is tied into the American Dollar. They have recently starting making efforts to diversify out of US Dollars and into more hard assets like commodities, but none the less they have a huge position. For that reason I believe its safer, at least until the crisis occurs, to have your capital positioned in a country that will not be affected as severely. However, once this crisis does occur China and the other asian countries will take the torch for the long haul, and that is the time that I will begin moving heavily into the asian markets. I believe now is a good time to get into the resource markets that these asian countries will demand for growth, but thats for another post.

Recession Proof? Can it Be?

Atlantic Energy Solutions (AESO:OTC) $0.08

I believe that I may have found a recession proof, or rather a recession loving company. They are in the business of finding more cost effective energy solutions for other businesses. It does seem that during times of recession most businesses will look to cut costs as much as possible and you can only fire so many employees right? All signs are pointing to a more severe, long term recession, as I would think that many businesses would be looking to do two things: get as lean as possible to weather the coming years and also cut energy prices as the cost of oil will not stay low for very long.
If you look at the companies chart below you'll notice that as the market crash occurred their stock price soared, and as the market bottomed and the rally occurred their stock tanked backwards. It could be a beautiful sign.
The only potential negative that I could find had to do with the correlation between oil prices and their stock price. It could be that their PPS increased with the oil price until about July 2008. From there the price of oil crashed but their PPS Continued higher until about February 2009. Did the PPS simply lag behind the price of oil? Is the PPS increase related more to the drop in stocks or the rise in oil? it seems alot closer to the drop in stock prices to me.....

AESO:PK 2 YR CHART

DJIA 5 YR CHART

AVERAGE GAS PRICE CHART(I couldn't get an oil chart picture on here)

Real Estate Collapse to Continue.....

You think the subprime was bad enough?
Listen to the research these pro's have done and what it shows for our future!

Canada's Oil Reserves + Commodity Currency

Canadian Oil has long been underestimated as people believe that the US imports the majority of its crude oil from Saudi Arabia and other middle eastern countries. However, quite the opposite is true; the United States, the "oil addict", brings the majority of its oil in from Canada every year, and the numbers keep growing. What most people don't know is that Canadian Oil Reserves could be the largest in the world, as there havn't been any significant discoveries in the middle east in quite some time, and the royal family will not allow an audit of its reserves (whose numbers havn't changed since almost 2006). So as you can tell the Arabic Oil on which the US "depends" is actually in question. Are there really as many barrels in the ground as they say? As a massive emerging economy, China's oil addiction is growing every year as well, and they will need an oil rich nation to depend on in the coming years. Canada's vast reserves of oil make its currency, the Canadian Dollar, what we call a commodity currency. This means that as the dependence on Canadian Oil increases and like wise the profits, the currency will follow suit, so you win on two levels. That is what makes Canada an A+ oil play, especially if the Saudi's are not being truthful about their reserves. This is an excellent investment for the coming years; as the rate of inflation within the US is set to rise the Canadian Dollar will be a good hedge against a devaluing currency. Companies like
Husky Energy(HSE:TSX) will see nice gains through their future and they will also provide you with quarterly dividends in Canadian Currency. The idea behind this investing technique is that when you purchase stocks on a foreign exchange like the Toronto Exchange (TSX) your US Dollars are converted into Canadian Dollars, and likewise down the road when you cash out, your money will be converted back. So you actually profit on 3 levels, first the stock itself will increase in price, second the currency will increase in price (or at least act as a hedge against a sliding US Dollar), and third the dividends are like a sign on bonus that you receive either quarterly or annually based on the company.

Use your head, Invest wisely and the profits will follow beind...

How to Profit from the Natural Gas Rebound

If your a logical thinker, as I like to believe I am. You'd be questioning the current prices of natural gas. Now I dont believe that the price should be any higher given the current surplus we have, Supply and Demand should always rule the market. However, I do think that in the near future the surplus will begin to dwindle, and there may be a lag between having to much natural gas and having to little, thats how things usually work, from one extreme to the other. Right now the Companies involved with the exploration and production have slowed their pace to a fraction of what it was a year ago, in an effort to cut as many costs as possible. Its only a natural reaction to a sharp price drop; I think that any business owner would try to get as lean as possible, maybe shut down some projects that are currently unneccessary, postpone some explorations that were in the mix, etc.
So as the winter months roll around and the world begins to flip on the heat I would guess that the current surplus would begin to diminish, and as the forcast is for a 2010 economic recovery, the demand for gas (and oil) will increase. So when the demand increases and the surplus fades its going to take time for these companies to get back into their normal production modes, thus producing a lag between supply and demand. There are a few ways to play this rebound in Natural Gas prices, and I believe that one of the most profitable buys right now is the United States Natual Gas Fund (UNG:NYSE). The price on this Fund has been beaten down so severly that just a rebound to normative price levels would mean nearly a 200% gain. Another great buy is Chesapeake Energy (CHK:NYSE), here you would be looking at a 100% gain if prices rebound back to their early 2008 levels. Can we expect a full recovery? no one knows for sure, but right now there is a serious offset if supply and demand which is affectin the price, and once these imbalances begin to correct we will see some sort of price gain.

Good Luck and Safe Investing

Wind Energy, Green Energy, Energy of the Future

Its no surprise that our dependence on fossil fuels is a dangerous one. With the worlds demand for energy growing at an unprecidented rate it is time to look elsewhere for our future energy sources. Renewable energy is no longer a back-burner idea. Its something that investors are pumping billions into, as its being put into action around the world. China's plans are to increase their wind power to service 30% of there energy requirements by year 2020. Thats nearly 100GW or 100,000MW.
The USA isnt far behind with projections of nearly 20% of its energy being generated through wind power by 2020. Fossil fuels are going to become more and more expensive as the world reserves diminish each year by approximately 4.5%.
There hasn't been any large fossil fuel discoveries in years now, and alot of the major wells are begining to dry up. The Saudi's claim to have some 250 Billion barrels of oil reserves remaining but they refuse to allow an audit to provide proof of these estimates.
The Chinese have taken the lead as the largest wind turbine manufacturers with two of their companies pushing aggresive distribution plans. GoldWind and Sinovel are the two largest chinese companies that have really stepped up and taken over the turbine market, however there are some American companies that will be a large part of the show also. Vestas has a 20% market share in the alternative energy sector and there are others that fall into the same category. I believe that the best places to pull profit from this huge new energy sector are going to be the small cap companies that get into the action on the ground floor.
One of these companies is A-Power Energy Generation(APWR). Currently trading at about $8.36, this company has a huge position. Its partnered with GE, and has alot of major alliances and a nice contract with chinese Shenyang Power Alliance. This company could easily be trading at $20/ share at this time next year.

What the Price of Gold is Telling Us...

By: Ron Paul

This speech was given by Congressman Ron Paul on April 25, 2006 before the House of Representatives. It reveals a level of economic understanding that I believe very few politicians have today. Within his lengthy speech Congressman Paul covers every detail of our current economic situation. He explains the history behind his belief in a "commodity" currency (gold standard or an equivalent thereof)and the resulting economic stability. He explains the negative effects and instability that result from an alternative "fiat" currency, which is the precise position we are currently entangled in. And he explains the necessary changes that need to be made to correct the problems. He uses a very painful, yet truthful, analogy to convey his point.

"The best analogy to our affinity for government spending, borrowing, and inflating is that of a drug addict who knows if he doesn’t quit he’ll die; yet he can’t quit because of the heavy price required to overcome the dependency. The right choice is very difficult, but remaining addicted to drugs guarantees the death of the patient, while our addiction to deficit spending, debt, and inflation guarantees the collapse of our economy."

I believe that Congressman Paul is a wise and honest man, he understands where we are headed and where we should be headed. He should be a very strong candidate for future presidential runnings.

Canadian Oil Sands

Though the Alberta Oil Sands have rightfully inherited the title as the "worlds dirtiest oil", they do contain almost 97% of Canada's crude oil supply. Before the collapse in oil prices and the start of our current economic crisis the oil sands produced nearly 3/4 of a million barrels of synthetic crude oil each day, with a forecast of doubling the output by 2015. There is alot of work involved in tapping these unusual resources and until fairly recently the price of oil did not allow for such expensive projects. For each barrel of oil that is pulled from the sands the forest above must first be cut down, then approximately 2 tons of peat moss must be removed and finally about 2 more tons of sand must be removed from which to extract the oil; a very time consuming task. However, the majority of the oil contained within the Alberta Sands was until very recently unretrievable. It was so far below the surface and so frozen that it was impossible to extract. But with the new "in-situ" extraction methods such as SAGD (steam assisted gravity drainage) it becomes possible to retreive the oil in a cost effective manor.
The USA has been searching for a way to cut its dependency on OPEC oil for years now, and it seems like in the future the Alberta Oil Sands may be just the relief we've been waiting for.
My theory is that the economic crisis will continue to stunt the growth and development of the Oil Sands for the coming years. However, once things begin to level and the demand for oil starts to rise, the USA will continue its search for an OPEC competitor, and this is when activity in the Sands will resume its course with a vengence. There are also alot of environmental issues that are currently associated with the Alberta Sands but I believe the new "in-situ" extraction methods like the SAGD system will allow for a much cleaner and more affordable extraction of the crude oil contained there in the future. I believe that the sands will be an excellent investment home for the years to come, especially since so many of the worlds major reserves are on their way out.
To get the most bang for your buck here i think you should look for smaller companies that own rights to currently under-developed pieces of the Alberta Sands, as they will be serious candidates for future growth or buyouts.

Emerging Markets for Investment

The term Emerging Markets is used to describe a countries social or business activity in the process of rapid growth and industrialization.

The complete list of Emerging Markets is as follows:
Argentina, Brazil, Chile, China, Columbia, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morrocco, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, and Turkey

Some of the Big Emerging Market(BEM) Economies are:
Brazil, China, Egypt, India, Indonesia, Mexico, Philippines, Poland, Russia, South Africa, South Korea, and Turkey.
The Largest Emerging Markets can be described with some new terms like BRIMC:
Brazil, Russia, India, Mexico, and China

The two largest Emerging Markets are India and China

Why the Meltdown Should have suprised No One- Peter Schiff