The Controversy

*If you have not already subscribed to our weekly interactive newsletter, please visit: http://equedia.com/newsletter/

For the full interactive edition, please CLICK HERE

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

It’s amazing how the market reacts to news. Conformity is human nature. All it takes is one event to sway an investor’s opinion. When one person sells, it entices the other to do the same and the domino effect kicks in.

There’s no changing that.

That’s why last week, I told everyone that the markets would react very negatively to Japan’s quake, even though the markets climbed the day of (see The Beginning of the End). But it wasn’t until Monday when the markets collapsed, that many of the other newsletter writers, journalists, and analysts screamed sell orders.

When they did, I took the opportunity to buy more Kiska Metals (TSX.V: KSK) and added Barrick (TSX, NYSE: ABX) to my portfolio on Tuesday.

Before we continue, I want to thank everyone for the overwhelming responses and comments from last week’s survey on which version of the Equedia Letter you liked better (see survery here). To see all of the genuine and insightful comments made by you guys was very rewarding. Thank you!

As you can see from this letter, the votes are in and a staggering 70.4% of you have opted for the New Look.

So the new look it is.

With the overwhelming response, I`d like to ask you another simple question.

How many of you use twitter?

We’ve had a lot of requests for us to start using the social service but I am not much of a social networker and I believe our audience isn’t either. But I have been wrong before.

So let us know if you use Twitter by CLICKING HERE

The big question this week is, “Has the market bottomed?”

It seems the answer is split right down the middle. People are telling you to buy and some are telling you to hold.

While a lot of the chartists and technical traders are saying that the panic selling has yet to come, I disagree. It has already begun – especially on the junior exchanges where a lot risk has been taken off the table by the boat loads. It doesn’t mean the selling is over, but there certainly were opportunities to profit last week.

The market erased all of the gains made this year as of last Wednesday. Volatility is still here but the witching options expiry is over and we actually ended the week on a positive note. To me, this signals bull market support from traders and a positive note for the market. The volatility now rests more with the continued nuclear crisis in Japan, and tensions in the Middle East – which thus far has slowed down as Libya announced a ceasefire.

There are many ways to play the coming months and I remain completely bullish on the resource and commodities sector. Companies with dividends in the telecom and energy sector are looking good, but oil and gas is on the top of my radar, as are precious metals stocks.

Record earnings this year have pulled in some of the highest profit margins since 1993 for many of the oil and gas producers. That means most of these oil companies can not only sustain their current dividend levels, but also increase them if they choose – especially with oil above the $80 mark. Oil is over $100 right now which leaves a lot of room for error.

The worldwide demand for oil will decrease based on Japan’s recent disaster, but this is very short term. Without the nuclear power plants, it will have to turn to oil and gas – coal and other means will not nearly be enough. I would not be surprised to see oil test the $110 mark sometime this year.

While we may not fully be in the clear for this year’s bull market, we have taken a big step forward. Again, timing is everything but I added more stocks this past week because I think the bargains were there if you’re willing to hold for the next 4-6 months. I still think the overall markets will climb this year and end up in green territory moving into 2012, despite the panic-induced market behaviour.

But after that, I am not so sure.

While the markets may go up this year, the global economy is still shattered from 2008. Job numbers and earnings are improving but still nowhere near comfortable levels that warrant any major economic relief. That means the US government will more than likely step in again and pull more money out of thin air. The consequences of the printing press will undoubtedly unmask its ugly head within the next five years. The first layers have already begun peeling off.

We’re experiencing inflation. Prices of food, commodities, oil, gas, and everything have risen. In January 2010, China recorded an inflation rate of 1.5%. The rate of Chinese inflation is now 4.9% as of last month. Food and property prices in China are skyrocketing. On an annual basis, food in China has already increased 10.3% with grain climbing 15% and fruit up over 34% since the beginning of last year. Cotton prices worldwide is up over 170% in the last year and oil is once again above $100.

The US inflation rate is near a two-year high, growing another 0.5% in the last month. Those numbers are lot higher than what they print, given that food and energy prices have climbed at much higher rates. Still don’t believe inflation is here?

You would be nuts to believe otherwise.

The Fed this week held interest rates at record lows of near 0 per cent and kept in place an unprecedented programme to buy up 600 billion dollars in government bonds, all while running the US runs its biggest deficit in history. The money supply continues to increase at the most astronomical rate EVER.

We’ve been keeping our eyes on the debt levels since December 2009 when the national debt level was just over $12 trillion (see The Impressive News Release). In January 2011, it reached $14 trillion. Only a few short months later, the number is now at $14,245,580,000. An increase of nearly $200 billion!

Watch the sucker climb here:

Heck, it’s not just the US. The average public debt ratio of advanced countries will exceed 100 percent of their gross domestic product this year for the first time since the last world war. The next five to ten years won’t be pretty.

While the Dollar will not completely collapse, as many extremists and columnists trying to make a name for himself are trying to make you believe, it will lose its buying power. The only things backing up the US dollar on a global scale now is the gold in Fort Knox and the amount of money the Country owes China.

Cash is no longer king.

Two of the world’s most favoured currencies, the Dollar and the Euro, are both losing their purchasing power on a worldwide level. The more money you have, the less its actually worth. The only way to beat inflation is by making bets that will show a greater return than inflation itself. And that won’t be easy given how fast inflation is already rising. This obviously spells dark times for Americans as high unemployment and climbing prices continue to hamper growth.

While the US takes full credit for the stock market’s rise by infusing the economy with limitless cash (see Beyond Comprehension), it takes no responsibility for the rise in the cost of goods. So while the stock market may increase a percentage or two from the printing press, the cost of other things such as food and energy are rising at much faster rates.

Bernanke and the US government will tell you otherwise, but the proof is in the pudding. Inflation is not only here, but getting worse. The only safe haven that has beaten current inflationary pressures thus far has been precious metals.

Imagine what will happen to precious metals, which have already soared on safe haven inflationary pressures, when Bernanke starts revealing the true inflation rates.

“I care not what puppet is placed on the throne of England to rule the Empire. The man who controls Britain’s money supply controls the British Empire and I control the British money supply.” – Nathan Rothschild (1777-1836)

The Gold Bull Run Isn’t Over

Whether you believe it or not, gold is valuable and fiat currencies are often pegged to the value of gold. In reality, the true value of gold does not change. What has changed is the decrease in value of the fiat currencies used to measure the gold price. That’s why gold has climbed the way it has.

There’s no doubt in my mind that we have yet to see the peak of the bubble in the gold and silver run. The factors supporting the rise of precious metals mentioned in our past issues of the Equedia Weekly Letter continues to ring true.

The inflationary crisis at hand has already caused the world’s fastest growing economy, China, to add more bullion to their vaults. Citizens continue to add precious metals to their bank accounts instead of cash. Given their actions in the the last two months, China is already on track to buy half of the world’s gold production. According to UBS, Chinese gold demand exceeded 7.05 million ounces in the first two months of 2011, which is equal to nearly 50% of all the gold produced in the same two months.

There are just so many reasons to support the climbing price of both gold and silver, regardless of China. But as an investor, that’s not what has me excited. Safe is great. But making big returns is better.

Last year, gold stocks as a group did not perform nearly as well as the bullion itself. But this year, as I have mentioned before, it will change.

Gold stocks in general are cheap relative to bullion. The XAU Philadelphia Gold and Silver Index, consisting of 11 of the top traded gold and silver producers, trades at approximately 15% of the bullion price vs. a historical norm of well above 20%. Even if gold prices remain flat, which I don’t expect, gold stocks should outperform.

Much like 2010, I expect the juniors to rage on and climb towards the latter part of the year and I expect the mid and large cap producers to slowly continue their climb after this volatility settles.

Investing, speculating, gambling – it really doesn’t matter what words you use to describe risking money. A bet is a bet. As someone who risks his money to make a return in the markets, I don’t invest by predicting major crisis events – such as the recent quake in Japan. You can’t predict those things. I invest based on market fundamentals and speculate on anticipated market perceptions both in the short and long term. Perception is reality and there is conformity amongst both fear and greed. That will never change.

So absent of any major oil shock or disastrous world event, the market should perform well over the course of the year because people need to beat the rate of inflation just to survive. The US government will continue to add more money into the system which will help the stock market climb, but in its attempt, it will cause prices to rise. This in turn will force investors to make riskier bets in the market to beat inflation, and thus forcing the market higher.

Six months from now, I believe that many of the big name gold and silver producers will climb, along with junior precious metals stocks with strong fundamentals.

On the otherhand, if you think we’re going to have another 2008 style crash, gold stocks will undoubtedly get hurt. But like before, the stage would be set for some incredible returns. I expect that many gold and silver stocks (both juniors and majors) will come back and break out to new highs over the course of the next few years – probably sooner.

I took a lot of profits off the table in February and early March, but much of that is slowly moving back into the market. Next week will be interesting, but I don’t think it will be as volatile as the last. A lot of newsletter writers, chartists, and technical traders believe the markets are continuing sharply down.

I would not be surprised to see the week end up higher.

Until next week,

Ivan Lo

Managing Director, Equedia Weekly

Equedia Network Corporation

www.equedia.com

Questions?

Call Us Toll Free: 1-888-EQUEDIA (378-3342)

We are biased towards Kiska Metals because we own shares of Kiska Metals. We are also biased because they are a client of ours and we own options in the Company. Our reputation is built upon on the companies we feature. That is why we invest in every company we feature in our Special Report Editions, including Kiska Metals.

For the full interactive newsletter and report, please follow this link: http://archive.constantcontact.com/fs005/1102243211822/archive/1104877630006.html

If you have not already subscribed to Equedia Weekly, you may sign up here:http://equedia.com/newsletter/

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.

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., owner of Equedia.com has been paid $45,000 plus hst for a 19-month consulting agreement and 7 months of media coverage on Kiska Metals Corporation and has been granted 100,000 options at $1.35 vesting over a two year period. Kiska Metals has paid for this service. Equedia.com currently owns shares of Kiska Metals Corporation and we may purchase more shares without notice. We intend to sell every share we own for our own profit. We may sell shares in Kiska Metals Corporation without notice to our subscribers.

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.