Well, what can I say about the price of gold?

I told you folks at the start of summer that we would eventually see gold consolidate back around the 700 level which would serve as the floor price of gold by the end of this year. And that is what is happening…right?

You need to pay attention to what I say cause I am not just “whistling Dixie.” I make every attempt to follow those who have proven to me to be the experts in this gold market and the consensus is for gold to continue climbing long term. Remember what I have said before and I will say it again.

Think long term… Think long term… Think long term… Think long term…

I just got back from the Arctic Circle last night. A place called Nunavut. The Nunavut territory was discovered in 1576 while explorers were hunting for the mythical Northwest Passage to the rich lands of the east. Now where in the heck is Nunavut?

Great place and good experience. Definitely a long way as it took 2 days to get where I was going. I flew to Edmonton and from there about 600 miles or so further north to a place called Yellowknife. And once in Yellowknife I boarded a twin engine Otter plane with floats -one of those that land and take off in the water.

After leaving Yellowknife I said good bye to McDonalds. Oh, what did I see while north of the Artic Circle? I saw a couple of huge caribou... gigantic. At the main mining camp I was told that these caribou migrate every year and their path runs parallel to the camp. Last year 186,000 of these fellows passed by in a line 7 miles long. There are also man eating muscox here but fortunately I did not run into one of these. Excuse me; maybe it was the grizzlies in the area that are the man eaters.

30 years ago there was zero mining conducted north of the Arctic Circle. Now, things are changing rapidly as the infrastructure is being developed to utilize the valuable resources up north. Nunavut, where I visited, is inhabited by the Inuit people and if this land were a nation it would be the least populated country in the world. 

“The sheer size and richness of all these Northern resources, together with increasing demand and rising world prices, make a very good business case for focusing exploration dollars and development capital in Nunavut and the Northwest Territories.” “A $280 million deep water port in Bathurst Inlet to open up a supply route through Nunavut and the Northwest Passage has long been proposed by the economic wing of the Kitikmeot Inuit Association.”

I visited about half a dozen different mining projects and one thought kept recurring in my mind. And that thought was the following below.

“They ain't making any more land.”

And this reasoning can well be applied to the resource sector as well. Why am I confident that the resource market, including precious and base metals, is the place to be today and for the “long term?” Only 30 years ago the Artic was thought to be a no mans land from which no one could successfully extract even a single resource ounce. And now after 25 years things are changing dramatically. The technology and the infrastructure have now been advanced such that this cold and exotic region can now be explored and developed.

Plus, the greatest determining factor is “need.” And today the world needs more zinc, more copper, more gold, more lead, more rare earth metals, more silver, more platinum…more of everything really. And what I like about this area is that the wealth being derived from these various mineral projects is being shared with the local Nunavut’s native population…the Inuit people.

“$1.2 billion dollars in compensation money will pass from the federal government to the people of Nunavut over fourteen years, ending in 2007.” 

I read this week where Greenpeace is protesting against a mining project in Romania. 

Let me share a simple fact here. The earth is for the sustenance of all the people that dwell on it. The world does not exist solely for the benefit of a few privileged environmentalists and nature lovers. 

I don’t mean to put an over emphasis on just the artic region. But I am doing so now because I just returned from there. And I don’t wish to put an over emphasis on where our money should be right now. But I will anyway. 

All of us should consider investing in this precious mother earth as the worlds population is now earnestly crying out for her resources. Supply and demand is what generates profits and all anyone has to do is observe the worlds growing thirst and hunger for all that dear mother earth can produce. A lot of profits down the road for those with the imagination to see these facts. And let’s get back to gold and silver as that is my favorite subject. Read the following below.

Hi David

“I recently returned from a business trip to China. If anyone is in any doubt about the exponential rate of China’s economic growth they should pay a visit to a city called EWU ( pronounced eewoo) 100 miles south of Shanghai. This city, with a population of roughly 500,000, acts as a distributor of every type of household, hardware, clothing and electrical product you can imagine. The entire city, along with 12 units each the size of a large shopping centre are devoted to wholesale distribution. At first you think that you are in a retail park, and then it dawns on you that these are not retailers, they are wholesale distributors, and you can only buy a minimum of 10 units. Further, the old label of poor quality is also changing. Quality standards are improving rapidly. By the way I am a gold trader and enjoy your pronouncements.”

Tony Lawrence 

I just received an email from Hugh in BC. What does ole’ Hugh have to say?

Hi David,

“I wanted to ask your opinion of Chris Laird's recent article posted on XXXX entitled, 'Gold and Stock Creamout' in which he poses the opinion the worlds central bankers are working in unison to collapse stock markets and the gold price by increasing interest rates with the objective of buying into the ensuing weakness and panic in these markets. He seems to think…” “I guess after four years in the trenches I'm getting a little battle fatigue and after the last gut wrenching correction need some reassurance the worst is behind, not ahead of us. I look forward to your response, thanks again for all the great commentary.”

Sincerely, 

Hugh 

B.C.

Well Hugh, what can I say? You seem to be one of those nuts like Bill Murphy who believe in manipulation in the financial markets. Hugh, Hugh, Hugh. Don’t you believe in the overall honesty and integrity of “man?” Hugh, all one has to do is to examine and witness the high standards exhibited by our financial ethical leaders these past few years to realize that any type of financial manipulation is just a myth.

Hugh, look back at the high ethical standards maintained by leaders such as Ken Lay, Martha Stewart, Bernie Ebbers and others. Hugh, where is your sense of objectivity? Hugh, if we listen to folks such as yourself the next thing we know we will be doubting the oil companies when they inform us they are doing everything possible they know to do to keep oil prices down.

Hugh, you said in closing the following, “…need some reassurance the worst is behind, not ahead of us.” Hugh, the worst will only be behind you when you are dead. Provided you go to the right place and if not then the opposite will be true.

And what can I say about the escalating violence in the mid east right now?

“Gingrich Says World War III Has Begun” “World War III has begun, and the nation’s leadership is failing to deal with this reality, former House of Representatives Speaker Newt Gingrich concludes.” “Gingrich says the current crisis facing Israel is part of a larger world war that involved the U.S.” “Gingrich explained: "We are in the early stages of what I would describe as the third world war, and frankly, our bureaucracies aren’t responding fast enough.” 

Have you written me yet? Let me hear from you.

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