The Call for Cash

The markets have been doing well. The S&P 500 has now soared beyond the July highs of last year. As I said before, I wouldn't be surprised to see the market shock us with gains in the short term. But don't be so quick to think that everything is back to normal. Things won't return back to normalcy for a long time. There is going to be some major economic restructuring around the world before we can expect a normal market.

The markets have been doing well. The S&P 500 has now soared beyond the July highs of last year. As I said before, I wouldn't be surprised to see the market shock us with gains in the short term. But don't be so quick to think that everything is back to normal. Things won't return back to normalcy for a long time. There is going to be some major economic restructuring around the world before we can expect a normal market.

Usage: Feel free to post this article anywhere you’d like. Just be sure to follow the rules set forth in our usage agreement by CLICKING HERE

The markets have been doing well. The S&P 500 has now soared beyond the July highs of last year. As I said before, I wouldn’t be surprised to see the market shock us with gains in the short term (see The Last One Standing.)

But don’t be so quick to think that everything is back to normal. Things won’t return back to normalcy for a long time. There is going to be some major economic restructuring around the world before we can expect a normal market.

For the past few weeks and beyond, I have talked about Europe and the US flooding the world with new money. Just last week, the International Monetary Fund called for a another $600 billion to limit the fallout from Europe’s debt crisis. It had already requested $500 billion two years ago.

Europe has already pledged to inject $200 billion but that still leaves another $300-400 billion to meet the IMF’s call. The US has already said it has no intention of adding more funds, considering its own problems at home. But as Europe’s debt crisis is widely seen as the biggest threat to the global economy, don’t be surprised if the US finds a way to create a few hundred billion to add to the cause.

While the markets have cheered the reports of the IMF’s request of funds, the IMF still needs to acquire those funds in order to keep the markets happy. The market is a finicky child that can be made happy with the thought and excitement of something happening. But at the end of the day, something has to happen for the markets to keep up. Right now, there’s nothing new.

In order for the markets and the economy to continue what appears to be an uptrend, it’s going to need more money. More money means more debt. And more debt means a growing inability to service it.

A debt saturated society cannot grow. As debt servicing grows by the day, the economy losses steam unless more cheap money is available and more printed money is released. But this just adds more fuel to the fire.

In the US, you can get 30-year fixed rate mortgages for less than 4% – even with 2.2 million homes already in the foreclosure process and another 13 million homes with negative or near negative equity. There are car dealers offering 0% financing with nothing down for 60 months and furniture stores offering 0% financing for nearly the same with no payments. So while current economic numbers appear strong, they are a result of incredibly cheap capital which cannot be sustained. Banks are willing to take big risks because the Federal Reserve provides the banks with 0% funding, knowing the government will be there to bail them out if it blows up.

The Fundamentals are Simple

The fundamentals of the market are very simple. Based on what is required of the world governments to avoid complete chaos, gold and silver will continue its ongoing 11 years of consecutive positive returns. While the day-to-day price discovery of gold and silver will continue to be manipulated in the paper markets, the overall longer term trend is that gold will rise beyond $2000 and silver beyond $40.

I continue to favour gold and silver stocks, but also uranium stocks as I mentioned earlier last year (see Back to Reality). While the uranium sector has shown us little action, this will eventually change. There are screaming bargains out there for many of the uranium stocks and given the increasing demand of uranium, there will be no choice for the stocks but to move up. If you can stomach the market, stay the course and add to your positions.

While it may seem that precious metals and uranium stocks will never move back up, have faith in the psychology of the market. The smartest investors will tell you the best time to buy stocks is when nobody else wants them – especially given the current market climate where the fundamentals of gold, silver, and uranium are so incredibly strong. Investors don’t want these stocks right now because of the volatility in the market and the disconnect between the stocks and their commodity counterparts. Yet, here we have a situation where people don’t want precious metals and uranium stocks even when the fundamentals behind many of these deals scream buy. These fundamentals are only getting stronger.

This is a great buying opportunity. Load up.

Disclosure: I am long gold and silver through ETF’s and bullion, as well as long both major and junior gold and silver companies.

Until next week,

Ivan Lo

Equedia Weekly

Equedia Logo

Forward-Looking Statements

This Newsletter and report contains certain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from current expectations and projections. Except for statements of historical fact relating to the project, certain information contained herein constitutes “forward-looking statements”. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur.

Except for the statements of historical fact, the information contained herein is of a forward-looking nature. Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements expressed or implied by statements containing forward-looking information.

Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that statements containing forward looking information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on statements containing forward looking information. Readers should review the risk factors set out in the Company’s prospectus and the documents incorporated by reference.

Cautionary Note to U.S. Investors Concerning Estimates of Inferred Resources

This presentation uses the term “Inferred Resources”. U.S. investors are advised that while this term is recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize it. “Inferred Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of “Inferred Resources” may not form the basis of feasibility or other economic studies. U.S. investors are also cautioned not to assume that all or any part of an “Inferred Mineral Resource” exists, or is economically or legally mineable.

Disclaimer and Disclosure

Disclaimer and Disclosure Equedia.com & Equedia Network Corporation bears no liability for losses and/or damages arising from the use of this newsletter or any third party content provided herein. Equedia.com is an online financial newsletter owned by Equedia Network Corporation. We are focused on researching small-cap and large-cap public companies. Our past performance does not guarantee future results. Information in this report has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. This material is not an offer to sell or a solicitation of an offer to buy any securities or commodities.

Furthermore, to keep our reports and newsletters FREE, from time to time we may publish paid advertisements from third parties and sponsored companies. We are also compensated to perform research on specific companies and often act as consultants to many of the companies mentioned in this letter and on our website at equedia.com. We also make direct investments into many of these companies and own shares and/or options in them. Therefore, information should not be construed as unbiased. Each contract varies in duration, services performed and compensation received.

Equedia.com is not responsible for any claims made by any of the mentioned companies or third party content providers. You should independently investigate and fully understand all risks before investing. We are not a registered broker-dealer or financial advisor. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report OR ON Equedia.com will be the full responsibility of the person authorizing such transaction.

Again, this process allows us to continue publishing high-quality investment ideas at no cost to you whatsoever. If you ever have any questions or concerns about our business or publications, we encourage you to contact us at the email or phone number below.

Please view our privacy policy and disclaimer to view our full disclosure at http://equedia.com/cms.php/terms. Our views and opinions regarding the companies within Equedia.com are our own views and are based on information that we have received, which we assumed to be reliable. We do not guarantee that any of the companies will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect. Equedia.com is paid editorial fees for its writing and the dissemination of material and the companies featured do not have to meet any specific financial criteria. The companies represented by Equedia.com are typically development-stage companies that pose a much higher risk to investors. When investing in speculative stocks of this nature, it is possible to lose your entire investment over time. Statements included in this newsletter may contain forward looking statements, including the Company’s intentions, forecasts, plans or other matters that haven’t yet occurred. Such statements involve a number of risks and uncertainties. Further information on potential factors that may affect, delay or prevent such forward looking statements from coming to fruition can be found in their specific Financial reports.

Equedia Network Corporation is also a distributor (and not a publisher) of content supplied by third parties and Subscribers. Accordingly, Equedia Network Corporation has no more editorial control over such content than does a public library, bookstore, or newsstand. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by third parties, including information providers, Subscribers or any other user of the Equedia Network Corporation Network of Sites, are those of the respective author(s) or distributor(s) and not of Equedia Network Corporation. Neither Equedia Network Corporation nor any third-party provider of information guarantees the accuracy, completeness, or usefulness of any content, nor its merchantability or fitness for any particular purpose.