Back in the far reaches of time there was a prisoner that no one knew. Well at least in America. Back in 1962 a Black man was thrown in a jail (with the help of the CIA) because he wanted freedom. He wanted a say in his government, he wanted to be equal to those around him. He wanted an end to the poverty that was focused on ever other Black in the nation. He was a visionary, and that vision was enough to have him locked up for 27 years.

Back in the 1980’s people like Rev. Wright realized that this man existed in a tiny jail cell. They realized that what he wanted was an inalienable right. They realized that no nation should ever rule over its people in such a manner.

That nation was South Africa, the rule of law was Apartheid, and the man is Nelson Mandela.

Throughout the 1980’s and afterwards America woke up to the fact that a modern day slavery existed in the world. It was something the nation stood up and rejected, though not without resistance in some parts. But eventually the nation refused to do business with South Africa, hitting them in their pockets hard. We protested and held rallies. We politically turned up the heat internationally. And in 1990, Nelson Mandela saw the light of day as a free man. In 1994 he became the leader of his nation and abolished all vestiges of Apartheid. He led his nation to democratic rule, and improve the lives of millions of Africans in the process.

Today that man is 90 years old. An age many never envisioned him reaching in 1980. And his message today, though retired from elected office and generally from public life, is as strong as at any point prior. He seeks peace in Zimbabwe, as well as social and economic reform. He has fought to gain international attention to AIDS in Africa, and is a Nobel Prize winner. His words resonate as strongly in the world as almost and current national leader.

And I have to wonder. America woke up to Africa in 1980. For a brief moment the nation paid attention to a land filled with Black people, and the injustice being wrought by the Whites in power their. And then we walked away.

Today there is a genocide raging in Africa, and America does nothing. We don’t even discuss the atrocity on the nightly news. There are nations in unrest, and the majority of Americans can’t name 3 countries in the continent. [Most just refer to Africa as if it were one nation instead of multiple nations on a single continent. That’s not just rude, it’s stupid.] There are those starving, and those striving to survive, and America imagines the continent to be a big jungle filled with savages – even in the 21st Century.

“It is Not On Our Watch that again did something our nation seems incapable, or unwilling, to do. Today they gave $500,000 to the World Food Program (WFP) of the United Nations. The WFP has been providing food and support people in Darfur for years, in fact 70% of it’s aid goes to this area alone.”

Has America acted to help all the African nations? A bit. There is of course Somolia, and various donations of food and money given by individuals and a touch by the government. But that’s all the political polispeak of it. We aren’t involved in Africa. We don’t care what happens there. Because if we did all the African nations would be different today.

“America has become a policeman of the world in my lifetime. We have entered multiple nations as a peacekeeping force and in wars. Yet, for some reason America has turned its back while the equivalent of Orlando, Florida (or possibly Cleveland, Ohio – the exact number is unknown) have been killed since 2003. Let me make this clear, that’s between 200,000 to 400,000 men women and children that have been killed and counting.”

China is the leading investor in the African continent. America openly does business with, and therefore funds, the Sudan – funding the murder of children and women every day. I have spoken about HR 180 IH, and the presidential candidates won’t. Congress fails to act and the news media ignores it.

“When I think of Darfur I am reminded of a quote,

“Man's inhumanity to man is not only perpetrated by the vitriolic actions of those who are bad. It is also perpetrated by the vitiating inaction of those who are good.” – Dr. Martin Luther King.

Back in June I noted that there had not been a single candidate that had spoken about the atrocity in Darfur. Today that genocide in Darfur continues, Congress has not acted, and the Presidential candidates continue to turn a blind eye…”

But how much money has America poured into Serbia? How many laws were enacted to resolve that conflict? How many soldiers did we send to help end that genocide, which was discussed at least weekly on the news? And yet we can’t even pass one law to limit the money going to the Sudan from our government to say nothing of businesses.

Nelson Mandela is a great man. He has lead a life worthy of notice and remembrance. At 90 he continues to call out to the world to do the right thing. And America has gone back to the deaf ear it had the day the jail cell doors closed on Mr. Mandela.

We can do better, we can be better. And all the polispeak from both political parties is not enough to hide the fact that America treats all the African nations like they were in a Tarzan movie.

You can write to Congress to request action in preserving the lives of thousands of women and children via your local Senator or Congressman:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

https://forms.house.gov/wyr/welcome.shtml

Or

http://www.visi.com/juan/congress/

Labels: AIDS, Darfur Accountability and Divestment Act, Don Cheadle, HR 180 IH, Nelson Mandela, Polispeak, South Africa, United Nations

As I recall, back in December I spoke about the chance of the Dow Jones hitting 11,000. It was roughly the same time that I mentioned my targets for the price of oil (initially 110 and then upped to 125). So far one has exceeded my expectations the other is probably forthcoming to a similar degree. So what else can investors expect?

Well I think the mining sector has issues that are both positive and negative. So far there is still a huge run-up in commodity prices that is keeping many companies in the black that otherwise wouldn’t. Anglo Platinum out of South Africa is one such example though there are others. But this run up won’t last too much longer.

One of the main factors helping many mining companies has been the fact that supply has been cut. Energy shortages, most notably in South Africa but also in North America and Chile, forced supply down artificially helping to boost prices. But that is a problem that has been in the works of being fixed since the 1st quarter. Once it is done supply will rise to meet the growing demand and be a signal for profit taking.

Another factor to consider it the American economy. Mining companies eked out a mere .2 percent profit so far this year, though only one other group in the S&P 500 also held a profit. As costs for fuel continue to rise that profit margin is evaporating. Add in a decrease in demand due to cut-backs, and then an increase in supply and you have strong sell signals.

Of course there are still companies in the group that have room for these problems like Marathon Oil and Newmont Mining Corp. Marathon is only trading around 7.5x earnings and Newmont was the 9th best stock on the Philadelphia Stock Exchange Gold & Silver Index. Some analysts like Brian Barish of Cambiar feel they have not caught up to the surging resource prices and thus are worth owning.

So what is the net result? It’s no easy answer but since I expect a run up in heating oil and crude oil prices as the 3rd and 4th quarters hit, plus a continued bear market in the U.S. driving Gold and precious metals, my belief is that mining stocks will outperform most markets into the 2nd quarter of 2009.

Now that doesn’t mean profit, nor does it mean that other factors like who wins the U.S. Presidential race won’t affect the final results. But I think the odds are likely to favor all the mining stocks even if their books aren’t perfect. Its food for thought, take it as you will.

Labels: American economy, Anglo Platinum, Brian Barish, Dow Jones, election coverage, Marathon Oil, mining stocks, Newmont Mining Corp, Philadelphia Stock Exchange, S and P 500, South Africa

Gold prices took a bit of a hit with news hitting the markets early on Tuesday’s trading day. Lifting the general markets is the news that Warren Buffett has offered to provide reinsurance coverage for municipal bonds. While this does nothing for non-municipal securities, nor the mortgage backed loans that have caused severe losses across the financial markets, the move by Buffett has added to the confidence levels of investors. Early gains on the Dow Jones Index have hit 224 for the day.

Added to this is news that the International Monetary Fund (IMF) is planning to sell gold into the market. Approved over the weekend, the news was announced Tuesday and has driven down the April gold futures prices slightly. Gold continues to maintain above $920, but the ultimate effect of the sale has yet to really factor into the market.

Considering that South Africa, responsible for the 2nd largest amount of gold in the world, has reduced supply numbers due to power outages in that country the timing of the IMF sale seems to be an attempt to balance demand and keep prices lower.

"However, the fact that dips are still drawing very strong buying interest, and with the rest of the precious complex pushing higher, it seem likely gold will follow,” said James Moore, an analyst at TheBullionDesk.com.

The real thought to keep in mind is that if the offer by Warren Buffett instills enough confidence in the U.S. markets that investors feel a recession will be short-lived, profits in gold will likely be taken and depress the price. The IMF sale will have a real affect on gold spot prices, but will likely only have a short-term effect considering the lack of supply from South African mines.

Another factor that I believe has not hit the market yet are the 1st quarter results of the financials and banks still plagued by sub-prime mortgage loans. While Project Lifeline is being announced at 11:30 and will include home owners that are not in the sub-prime category, it does not affect losses that have already occurred. I continue to expect that all major losses will not be fully accounted for until the end of the 2nd quarter, thus still a pressure on the markets and positive for gold investors and stocks.

As these facts are absorbed by the markets, increased volatility and further upward pressure on gold should continue. It’s likely that the Philadelphia Gold and Silver Index and Amex Gold Bugs Index will reflect this pressure. Several Canadian gold miners are also likely to have a short-term boost as they will have increased sales due to lack of competition.

Perhaps most important will be the timing of all these events. If they are moderately spread out and occur individually I expect that they will not be able to retard the move in gold. Combined or occurring close together the effect will be magnified.

Labels: Amex Gold Bugs, Dow Jones Index, International Monetary Fund, James Moore, municipal bonds, Philadelphia Gold and Silver Index, Project Lifeline, South Africa, Warren Buffett

Mid-day February 11, 2008 gold futures prices have risen to $927. Gold continues to move forward, taking many of the gold stocks along with it. In fact speculation in the most precious yellow metal has grown dramatically on a global level. In China, Beijing Caishikou Department Store sold out of two tones of gold bars in less than 2 hours.

“The real value of gold is not that it provides a quick, speculative fix, but its capacity to provide a sure and steady means of protecting wealth and to enhance risk-adjusted returns,” said Hou Huimin, vice-chairman of China Gold Association.

With a weak dollar, spikes in oil prices - which are consistently above year ago levels, and an outlook of an unknown time period for an American recession gold hedges seem more attractive everywhere. And outside factors continue to add to this upward trend in prices.

Already the effect of Venezuelan President Hugo Chavez threatening to cut America off from that nations oil supply has added to the price of oil, while power shortages in South Africa have forced many mining companies to lower production, boosting in turn platinum and gold futures. This is having a net effect being seen in the Philadelphia Gold and Silver Index rising .73%, along with the CBOE Gold Index up .26% and the Amex Gold Bugs Index up .76%

Will the gold mining stocks of South Africa take a hit? Of course, and many other mining stocks will drop along with them. But that is hardly an indication of a bear market any more than the fact that once those mines are back online gold spot prices will drop. In a few weeks supply and demand factors will shift again with the aforementioned miners increasing supply. But the real factors moving gold in all the various investment markets is not the short-term actions that are the fodder of traders.

Protecting wealth and risk adjusted returns are the main concern right now as global markets look weaker by the day. With global instability and the other factors that are growing with no end in sight, I believe that gold will continue to increase in price. $1000 gold spot prices are not the top in my opinion but a stepping stone to a higher level. Whether shortages due to difficulty in mining or nature, increased demand in emerging markets like India and China, or economic weakness and general bear markets in stock markers globally I do not see a substantial retreat of gold or gold stocks in 2008.

Labels: Amex Gold Bugs, CBOE Gold Index, emerging markets, gold spot prices, gold stocks, hugo chavez, Philadelphia Gold and Silver Index, South Africa

Gold has hit $921 and the U.S. House of Representatives has passed a $146 billion stimulus package. The Fed is set to cut rates another .50 basis points, or so the world hopes, and financials are rising in the stock market.

So the run in gold and gold stocks is over? Not necessarily.

The fact is that little has changed. The mortgage crisis still has at least one more quarter to go. Oil may not be at the record levels set recently, but it is far above year ago levels. The cost of heating and gasoline are hitting the pockets hard, and the economy is slowing down causing fears of job loss. Demand is still high in China and India, and the political outlook in the world is no less volatile than it has been for years. And a recent power outage in South Africa looks like it will cause even more tightening of supplies.

In the most optimistic outlook, the rate cuts will not take a hold until late in the 3rd quarter at the earliest. Companies and individuals are now looking to pay off debt and not expand. The stimulus package will likely fail as many Americans will use the funds that will come in the late spring or summer to shore up debts and bills rather than going on a spending spree. And all this is just in America.

That also assumes that oil stays at current levels, no additional political instability, the mortgage crisis ends completely in this quarter, and the world economies have no surprises. It also assumes that new housing sales pick up from the 28 year low that was just broken, and a return to mid 1990’s or 2000 levels. How likely is that?

I expect that analysts are going to cut production rates across the board for the South African gold miners, and slash quarterly and year expectations. [Already gold miners like AngloGold Ashanti, Gold Fields and Harmony Gold have had thier share prices hit] Miners in other parts of the world should get a boost if new mines come on-line during the potential 6 weeks that South Africa is down, like Goldnev Resources Inc which just had positive results on recent core drilling tests.

So a glut in the gold market is not going to happen any time soon. Nor is political stability a reality. Oil is high, and the U.S. economy is lagging. And this says nothing of how the Dollar is valued versus the world currencies.

Given all this, do you think that calls for gold at $1000 just a week ago are inflated? Do you think that gold stocks have hit the wall of their appreciation?

All stock markets, all financial markets, move on emotion first. That’s given. And few things are more emotional that 1.25 basis point moves by the Fed in a week. But fundamental facts of the markets always come to fore and correct the emotion. To me, $1000 gold, and higher gold stocks across the world, is as fundamentally sound today as when I discussed it earlier this month and in December of 2007.

But then again I’m not a specialist. [You might want to look at what the one of the specialist – Goldman Sachs - had to say back in the ancient time of November 29, 2007 though] I suppose only time, demand, and investors will show what is the right view.

Labels: AngloGold Ashanti, Federal Reserve, Gold Fields, gold stocks, Goldnev Resources, Harmony Gold, housing sales, mortgage crisis, South Africa, stimulus package