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This is written about Silvermex Resources Ltd.

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A few weeks ago, Société Générale, one of the oldest banks in France and the 3rd largest Corporate and Investment bank in the Eurozone,  released a 68-page report entitled 'Worst-Case Debt Scenario: Protecting Yourself Against Economic Collapse."

In their report, they advised clients on how to prepare their portfolios in the case of a complete global economic collapse.

Hoping for the best, but preparing for the worst.

Under each category, they presented a bull and bear case for sector performance, highlighting the positives and negatives for each scenario.

What caught our attention in the report for specific sector performances was their view on Mining and Metals. In particular, Gold. Take a look.

Bear Economic Scenario:

"(Gold) should outperform commodity benchmark as gold would be sought out as a hedge against dollar risk ."

The report gave gold a positive outlook rating for both the short term (12 months) and long term (2 years) under a bearish economic scenario.

Bull Economic Scenario:

"Strong demand for inflation hedging and physical purposes should outweigh increasing supply ."

Even under the Bull scenario, the report gave gold a positive outlook rating and suggested that gold will outperform for both the short term (12 months) and long term (2 years).

Take a Look:
Société Générale Worst Case Debt Scenario Fourth Quarter Nov 2009                                                                                                                                                

Regardless of our economic outlook in this report, gold is set to thrive.

Combine that with the facts in our previous reports and you can see why our views on commodities and precious metals remain bullish. (see A New World Currency? What the US Goverment Doesn't Want You to Know - click here)

The U.S. dollar has been the world's reserve currency for the last 60 years. Many people believe this will never change. Perhaps not.

But that doesn't mean foreign countries won't find a workaround.

This year alone, China initiated more than $200 billion worth of swap agreements that allow their trading partners to pay for Chinese goods and services directly, without converting into dollars or having to trade their currency openly. The actual numbers could easily be more than double that but China and their trading partners may not want to anger the US or other European nations by disclosing the exact amount.

At the same time, you can bet that China will be looking to slowly unload more of their US Dollars in favour of Gold. (see Facts on Gold You Need to Know. - click here)

So while the US limps along attempting to sell bonds and implement further consumerism of their goods (Buy America), China and its trading partners are taking matters into their own hands and creating a new global marketplace for currency trading that's outside the traditional fiat paper currencies.

That's why investors continue their hurdle toward gold.

Despite recent events that should have fundamentally sent gold prices down, nothing has been able to stop gold in its tracks in this market:

  • The metal climbed 7.4 per cent in the previous nine sessions, the longest rally in 27 years.
  • The price has dropped only twice this month.
  • It has gained 33 per cent this year, heading for a ninth straight annual gain, while the dollar is down 7.7 per cent.

 

It's no wonder why every investor's focus is on gold and precious metals.

And the proof is in the pudding.

No other exchange is more dominated by resource and mining stocks than the TSX Venture and the Canadian markets . (see Key Things You Should Know - click here)

Now take a look at the Venture's performance in the last year.
 
TSX Venture Chart

Compare that with the Dow Jones


Dow Jones Industrial

Now with the S&P 500

S&P 500 Index

They may appear similar at first, but if you look closely, you'll see that in the last 52 weeks, the TSX Venture has beat both the S&P 500 and the Dow in overall performance and relative gains, by more than doubling its own value.

Even more interesting is the fact the TSX Venture could have been an indicator for our economic market crash back in March. By losing most of its value in 2008, well before the major decline in the overall markets of the DOW and S&P 500, it inherently predicted the fall of the stock market before the masses.

It' no surprise why we look toward the Canadian junior market, not only for profit, but as our crystal ball.

That's why we continue to focus and evaluate mining companies in the Canadian and TSX Venture markets.

Right now we have our sights set on our featured silver company on the TSX Venture, Silvermex Resources Ltd. (TSX-V: SMR) as it continues to hold ground near its 52-week high since the launch of our report.

If you missed that report, you can find it here: Click for Report

So, although we may see some sell-offs before Christmas, and possibly another bubble burst, you can be certain that the miners will remain strong in the long term.

Remember what happened back in March when the markets took its worst plummet ever in our modern age era? The miners and resource players were able to raise over $45 billion outside of the regular banking system! (see Playing Ball with Resources and Obama Talks G20 - click)

You can bet the investors who were part of the $45 billion investment are smiling from ear to ear.
 
Until next week,

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The full interactive version of this report can be found by following this link: http://archive.constantcontact.com/fs005/1102243211822/archive/1102852703673.html

 

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Return on Investment

Date: 11.30.09 Posted by: Bob Sugar

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the investors must have made a fortune!

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Silvermex

Date: 11.30.09 Posted by: Jake Feldon

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Looks like Silvermex is going to go

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