The Equedia Weekly Letter
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June 12, 2011

Dear Readers,

 

We live in a world where value no longer exists. Be it a diamond ring or a 10,000 sq ft mansion, nothing tangible in today's existence is worth anything.

 

When you can create as much value as you want out of thin air, you create an economy full of false hope. There's a reason why worldwide food prices are higher. There's a reason why you're paying more at the pump. While each scenario has its own implications, they all end up back at the printing press.

 

That leads us to what has been happening in the markets: light volume, whether we move to the upside or downside - in particular, the Canadian markets.

 

This past week, the markets were once again down with low volume - down for the sixth straight week. The buyers have taken an early vacation, leaving panicked sellers without anyone to sell into and thus forcing many stocks - particularly the juniors - down further. Bid support has disappeared.

 

Despite being down for the sixth straight week, we' re down less than 7% with no major technical support levels broken. The markets look oversold and I think we're moving closer to the bargain entry points I've been looking for. Sooner or later, the stink bids I told you to put in a few weeks ago (see Age of America Over?) will be filled giving you some great bargains to ride out until year end.

 

While there will be bargains, that also means the overall markets may still have further downward pressure. Especially when Federal Reserve Chairman Bernanke looks so defeated.

 

Last week I said, "With all of the money spent through all of the US' loose fiscal policies, nothing has changed." On Tuesday, Bernanke reiterated those statements causing the markets to fall even further down south.

 

In his Tuesday speech, he said that seven months after the central bank began a historic round of monetary stimulus, growth in the broader economy has been disappointing. But with the amount of money printed and no real results, Big Ben has planned to stay on course, ending stimulus on schedule this month and keeping monetary policy steady for the immediate future.

 

Bernanke has finally admitted what we already know.  The recovery has fallen short of the central bank's expectations by a number of different measures. Six out of ten leading indicators are bad and the other four appears to be getting worse: Unemployment is high, and anyone who has found work must accept lower wages than they previously earned. Home prices are falling at a newly accelerating rate (see The Greatest War in History), making homeowners more vulnerable to default and foreclosure. Manufacturing is down and oil is trading at levels reminiscent of 2008, when months of record-high fuel prices helped drag the economy into recession (combine that with OPEC's recent objection of raising supply.) All obvious points that I have mentioned in previous letters.

 

The central bank's ability to boost the economy, or its willingness to attempt to do so, has reached a limit. Or has it? Was the amount of money being spent really used to bolster the economy or was it used to bolster the wallets of the Fed by lending as much money as possible to the world's most powerful nation?

 

Bernanke has made it clear that there will be no QE3...yet. But before we make any judgements, let's not forget that after QE1, he hinted there wouldn't be a need for QE2.

 

The truth is, the next QE, be called QE3 or something completely different, will eventually happen. But before it does, America will need to feel the pain. Without pain, there will be no political will.

 

Canadian Housing Market

 

I am calling for a Canadian Housing bubble. While the markets have slowly climbed, especially in Western Canada, it has all been false hopes provided by foreign investors.

 

Sellers are beginning to feel the pressure of trying to sell at peak prices. Homes being listed now are taking months to sell, as opposed to days. New homebuyers are being forced into other markets. The peak is here.

 

Within the next 3-5 years, I am calling for up to a 25% dip in the Canadian real estate market.

 

Leading indicators are already telling the story. Building permits posted an unexpected 21% decline in April. The value of building permits issued in Canada in April unexpectedly plummeted 21.1 percent from March on weakness in the powerful province of Ontario. The month-on-month fall was the largest since the 23.7% drop recorded in January 2006.

   

Its not just Ontario experiencing a fall in both residential and non-residential real estate.

The total value of permits fell in seven provinces with Ontario - which accounted for over a third of all permits issued in April - posting by far the largest decline of 41.9 percent. Compared with April 2010, total building permits declined 19.7 percent, with residential permits down 7.8 percent and non-residential permits down 35.2 percent across Canada.

 

While these are just short term statistics, I believe we're about to see a decline in housing prices sooner than later.

 

Gold and Gold Stocks

 

My sentiment towards gold has not changed. When you look at the broader picture of the US and the world economies, the flight to safety and wealth preservation remains a top priority. Gold will climb higher - 'nuff said.

 

The biggest emphasis I want to make is the disconnect between gold and gold stocks. While gold has performed incredibly well, gold equities have underperformed. But sooner or later, as I have mentioned time and time again, it will change. When it does, we're going to see some spectacular gains in gold stocks (and other silver stocks, as well) - including the more speculative issues - as they play catch up.

 

Patience is a virtue. When you invest in gold equities in this market, you need both risk tolerance and patience. There is a reason we invest in gold equities and there is a reason why we invest in gold. When we trade our money for gold, we're trying to preserve wealth. When we put our money into gold equities, we're looking for higher returns knowing we're taking a higher risk.

 

The market swings in gold equities can be big, as we have already witnessed. Don't be suckered in by selling at the bottom and trying to play catch up when the market turns. I haven't sold any of my gold and silver stocks recently (the last time I sold was the week right before the correction - see Age of America Over?) because I strongly believe that the equity side of precious metals will turn and my patience will be rewarded with some phenomenal gains.

 

Despite the markets looking grim and uncertain, there are bright spots ahead - if you believe as I do.

 

 

   

 

Until next week,

 

Ivan Lo

Equedia Weekly  

 

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The Break Down  

 Kiska`s Winter Trail - Bigger and Better      

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Mining exploration in both the Yukon and Alaska takes a lot of work - and money. Most investors know this, but do they really know what goes on behind the scenes of a real exploration camp?

 

Unlike many juniors in Alaska and the Yukon, Kiska Metals is not just a small operation drilling a few holes hoping to hit the motherlode. They are exploring a brand new gold-copper district in Alaska that has seen many recent successful drill holes (see our orginal report: High Priority Targets).  

 

Watch the attached video as Kiska Metals shows you what it takes to drill in Alaska, as they successfully construct an Ice Road from Anchorage to the Whistler Property to move in supplies for the 2011 Exploration Program.  

 

The video is about 12 minutes long, but if you are looking to invest in the Yukon and Alaska mining boom, you need to watch the video to truly understand where and how your investment dollars are being spent. 

 

About Kiska Metals 

 

Kiska Metals Corporation is a mineral exploration company focused on advancing the Whistler Project, Alaska, which includes a multi-million ounce gold-copper resource and excellent exploration potential. Kiska has renowned technical expertise and a quality exploration portfolio with numerous early stage exploration opportunities around the world, some held in partnership with a selection of the world's largest and most successful gold and base metal producers.

 

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.   

 

Featured News:

Western Energy Services Corp. Completes Acquisition of Stoneham Drilling Trust Becoming Canada's Sixth Largest Contract Driller and Increases Its Revolving Credit Facility - Click to Read

Casey Research  

3 Ways to Shelter Your Cash from Inflation    

 

By Terry Coxon, The Casey Report 

  

Terry Coxon

The high rate of inflation most of us believe is waiting not too far down the road will be an earthquake for investment markets. The likely winners (gold, silver, precious metals stocks) and the likely losers (long-term bonds and most stocks) aren't too hard to identify. But separating the sheep from the goats is only one element for financial success in an environment of rapidly rising consumer prices.

 

Higher rates of price inflation will bring greater volatility to all financial markets. The higher you expect inflation and hence gold to go, the more volatility you should expect to see for assets of every type. Even if in fact the dollar is on the road to perdition, there will be detours and backtracking along the way.

 

Inflation doesn't operate smoothly; it is a disrupter for both the economy and for the political system. From time to time over the next five to ten years, the Federal Reserve will come to see inflation as its most urgent problem. And every time that happens, the Fed will slow the creation of fresh dollars or even put up a big INTERMISSION sign and stop printing altogether for a while.

 

Such seizures of monetary virtue won't last long, but while they do last, they will hammer most investment markets, including the market for the yellow stuff and for stocks of companies that produce or look for it. You could be absolutely correct about where the dollar is headed in the long run and still have a scary ride.

 

2008 was just a preview of the downdrafts you will need to survive. There will be even uglier smash-ups, and you don't want to be among the hard-money investors who get carried off on a stretcher. To avoid being one of them, you'll need to include cash as a constant, permanent element of your portfolio. Cash is a courage booster. Having a substantial cash reserve makes it easier to hold on to your other investments when they are getting battered and you are tempted to bail out. And cash gives you the wherewithal to buy on dips - and on the big dumps.

 

The Twins

 

Of course, cash will be the asset whose value is shrinking. But the rate at which the purchasing power of your cash declines will depend very much on how you hold it.

 

Interest rates on money market instruments, such as Treasury bills and large CDs, track the rate of inflation fairly closely. By creating money fast enough, the Federal Reserve can keep rates on money market instruments one or two percentage points below the inflation rate, but not indefinitely. And any such effort to suppress short-term interest rates succeeds at the cost of producing even higher inflation later. Similarly, the Fed can keep money market rates one or two points above the inflation rate for a while, with the likely eventual result of a slowing in inflation. But over long periods, the average yield on money market instruments about matches the average rate of inflation.

 

Given that money market yields travel the same path as inflation rates, holding cash doesn't seem to be terribly painful. The loss in purchasing power about gets made up for by the yield. That's a nice thought - until you think about taxes. Even though the yield is merely replacing the purchasing power being lost, the yield is subject to income tax, unless you do something about it.

 

Doing nothing about it is, in a subtle way, risky for your portfolio. When price inflation gets to, say, 10% and money market yields are near the same level, if you are in a 40% tax bracket, you'll be losing purchasing power on your cash at a rate of 4% per year. The situation will get worse as inflation moves higher, and you'll be tempted to cut back on cash in order to cut back on the leakage. And that will leave you dangerously ill-prepared for the next INTERMISSION sign.

 

Logically, then, to make holding cash cheap or even free, you need to...

 

Click Here to Continue Reading

 
More Casey Research Articles

 

> Police State Amerika 

> How I Know Another Correction Is Coming   

> Our Economic Future: From Best to Worst Case  


Featured News:

China seeks enhanced trade, investment ties with Chile - Click to Read

Screening for Stocks to Short 

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May was a tough month. And June hasn't started off any better.

 

And while Kevin Matras is always looking for stocks to buy, he`s also been looking for stocks to short.

 

So, with the market's recent weakness, if you think a stock is overpriced and overvalued, you can sell it and make money as it falls.

 

Watch the video as Kevin Matras goes over a powerful short selling screen to make money as the market goes down. 


More Zacks Videos
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> Growth and Income Stock Picks - June 10, 2011 

> Aggressive Growth Stock Picks - June 8, 2011 

> Value Stock Picks - June 7, 2011 

> How to Find the Best Industries and Best Stocks 

Featured BNN Clip:

Slowdown in China & Commodities - Click to Read

Technical Trading with Harry Boxer 
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Harry has more than 40 years of Wall Street investment and technical analysis experience, including eight years on Wall Street as chief technical analyst with three brokerage firms.

 

Watch the video as he walks you through his

technical analysis on a whole bunch of stocks he thinks you should be watching from last week. To see more videos, Click Here.


Harry Boxer

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Click Here to receive a Free 15-Day Trial to Harry Boxer's Real-Time Technical Trading Diary for Equedia members.

 

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Research in Motion
Using the search function at the top right corner of the website, search for any company. Let's use Research in Motion as an example. Once you reach their profile page, click on the MARKETS TAB. You should now see 12 seperate tabs underneath their logo. Try clicking on them and you will find in-depth information such as: 

Detailed Quotes - Depth/Level II - Options - Java Charts - News - Profile - Financials - Insiders trades - Filings - Analyst Consensus -  Earnings - Historical Data (Highs/Lows, Volumes, Closing/Opening Prices)
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There are many more useful features on Equedia.com but we think its better if you experience them for yourself. The more associates you have, the more useful Equedia will become for you. So use the new "invite my contacts" function and get started!

Forward-Looking Statements

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.


In This Issue
High-profile gold trader probed in tax scam allegationsn
3 Ways to Shelter Your Cash from Inflation
China seeks enhanced trade, investment ties with Chile
Screening for Stocks to Short
Featured BNN Clip: Slowdown in China & Commodities
Technical Trading with Harry Boxer
Morningstar: The Only Things Worth Owning in the U.S. Equity Space
Upload Your Own Videos
Equedia Tips- Markets Tab
Additional Features
Forward-Looking Statements
This Week's Most Wanted
Equedia Watch: Companies Under Evalualtion
Rants and Raves - Unrated, Uncut, and Unedited

 

Featured Reports   

 

The Equedia Report: The Next Big Alaskan Gold Play 

 

The Equedia Report: The Hidden Producer 

 


Quick Links

This Week's Most Wanted

 

The Stock Market's Most Interesting Videos That You Should Watch 

  


Equedia Watch   
Companies Under Evaluation This Past Week

 

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Rants and Raves 

 

Inside the mind of Equedia's editor - unrated, uncut, and unedited

 

It's hard to see your stocks fall in price, day after day. Most of us invest in the junior miners hoping to land the big win but we all know they won't all be multi-baggers.

 

In this market, it really doesn't matter what you're investing in right now, it all seems to go down.

 

But I think the market for us junior mining investors will turn. These investments are not like the direct investments in gold and silver - don't treat them like it.

 

If you can't afford to invest over a longer time period, don't invest in these type of stocks. The movements in these type of stocks can be dramatic. But in the long run, if its  a great company hitting great drill results, the market will turn and we will be rewarded with multi-baggers.

 

I have a lot on my mind but have to keep it short this week - fishing trip with my son and he's begging me to hurry up.

 

I'll make it back to town just in time for the Vancouver Canucks to win the cup - then its time to celebrate.



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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 six thousand three hundred and thirty three Canadian dollars plus gst/hst per month for 6 months which totals thirty eight thousand dollars plus hst of media coverage on Minco Gold Corporation plus 60,000 stock options. Minco Gold Corporation has paid for this service. Equedia.com currently owns shares of Minco Gold 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 Minco Gold Corporation without notice to our subscribers. 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.

 

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